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credit card mix-up: how does this work?

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melon Apr 26, 2006 01:46 PM

My friend and I met at a bar/restaurant on Saturday night. I got there early, and put my credit card down to start a tab. When the check arrived, my friend insisted on paying the bill and received and signed the credit card slip. We'd had a few glasses of wine each, and the bill with tip came to $77.

On Monday morning, I found a charge from that bar/restaurant on my account for 76.80. My friend's card was charged $77. How could our two cards end up being charged for 2 different amounts? There is no way we could have had $154 worth of wine; we would have died.

I've emailed the manager with no response yet, but it was only this morning. I was just curious if anyone could figure out how this could even happen....? Also, I'm worried that the minor difference in amounts will prevent a refund.

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    ncchowdog RE: melon Apr 26, 2006 02:14 PM

    First let's assume your conclusion is correct and you did not consume $154 of wine...if you did then that explains your not remembering signing a charge. (It's a little suspicious that you checked the account on Monday, but I check mine all the time.) I would first call and ask to speak with the manager and ask him if you did or did not sign a credit card voucher and ask for a copy. If he wiggles or resists/refuses, then the follow-up is hopefully the charge is on AMEX. If it is, and since you saw on Monday I assume you have e-access to the account, just file a dispute. They will investigate. With respect to the e-mail, since you discovered the charge on Monday morning and only sent an e-mail this morning (that's a 48-hour time frame and is also suspicious)...you have to give him some time to answer. The difference in the amount does not matter, either its legit or its a mistake. Good luck.

    1. r
      Ruth Lafler RE: melon Apr 26, 2006 02:54 PM

      Restaurants often "pre-approve" your tab by inputting an estimate of the total bill on your card when they run out the bill -- that puts a temporary charge on your account for that amount. Since you gave them your card first to guarantee the tab, this is probably what happened. Since the charge to your card was never finalized, it should disappear off you statement in a day or two. If it doesn't, you should, or course, call the restaurant and talk to the manager.

      15 Replies
      1. re: Ruth Lafler
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        JB RE: Ruth Lafler Apr 26, 2006 03:33 PM

        What I believe happens is that a certain dollar amout is "reserved" or "allocated" from the available funds.

        1. re: Ruth Lafler
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          ncchowdog RE: Ruth Lafler Apr 26, 2006 04:12 PM

          I might agree that may have been the mistake if the charge/reserve was an integer, but the amount, $76.80, tends to make that theory fall apart.

          1. re: ncchowdog
            r
            Ruth Lafler RE: ncchowdog Apr 26, 2006 04:36 PM

            Not necessarily -- some systems automatically calculate 15 percent, which probably wouldn't be an integer, and add it for the estimated tip.

            1. re: Ruth Lafler
              k
              kjhart RE: Ruth Lafler Apr 26, 2006 05:06 PM

              I agree with Ruth. On my online bank statement restaurant charges usually show up in the "pending transactions" section with an amount that appears to be the bill plus a 15 or 20 % tip. When the transaction is finalized a few days later, it shows up with the actual amount I filled in on the charge slip.

              1. re: kjhart
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                ncchowdog RE: kjhart Apr 26, 2006 06:46 PM

                Nice catch...did not know that. Objection withdrawn; new objection raised. At 20%, the charge would have been $64 plus the 20% tip (nice catch). New objection is what right does the restaurant have to add a 20% chrge to the CC. Maybe the topic for another thread.

                1. re: ncchowdog
                  m
                  MikeG RE: ncchowdog Apr 26, 2006 07:33 PM

                  But they aren't "charging" that amount. It's like a weaker variation on certifying a check.

                  The credit card company is put on notice (and duly lowers your available credit) that a charge of $xx is expected to be put on the card at some time in the agreed-upon future, but it's not a true "charge," as in money you then owe the CC card, until the final charge is put through. 20% is perfectly reasonable as the higher end of the "customary" range.

                  1. re: MikeG
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                    ncchowdog RE: MikeG Apr 26, 2006 08:13 PM

                    No disagreement on the not "charged" until you either leave without signing or sign a real charge form. First off I have never been to a restaurant that asks for my charge card before I order so I'm in new territory here. My point is that the customer signed a charge with the restaurant and the restaurant has the right to the payment. The waiter/bartender is not a party to that agreeement so the restaurant should not take it upon itself to decide. Granted this situation arises because the customer walked on the bill and should pay for being a jerk, but I do not think the restaurant can take it upon itself to add a service surcharge to the jerk's bill.

                    1. re: ncchowdog
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                      Ruth Lafler RE: ncchowdog Apr 26, 2006 10:52 PM

                      The amount charged in the end is the amount the customer signs off on. Basically, what the restaurant is doing is making sure there's enough credit available to cover a reasonable estimate of what the charge will be. This happens all the time -- you just never know unless you happen to check your card online before the temporary hold is removed.

                      Think about it: you give the waiter your card -- they run the card and give you a print out to sign. When they do that, they're actually putting a hold on a predetermined amount (usually the total plus an estimated tip). When you sign it you add the actual tip, and they submit that as the final charge.

                      1. re: Ruth Lafler
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                        ncchowdog RE: Ruth Lafler Apr 27, 2006 06:36 AM

                        Rewind Ruth and read the OP. Data points - (1) Melon gives the card before ordering first drink to "start the tab," (2) June paid the bill in the end when drinks were finished, this is where you scenario would kick in. So question is how was the restaurant so clairvoyent in the beginning to guess the number would be within a buck of the actual. I think they tried to scam Melon and the explanation has as many holes as a sieve.

                        1. re: ncchowdog
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                          Das Ubergeek RE: ncchowdog Apr 27, 2006 12:45 PM

                          OK, talking here as an ex-bartender: when you give a card to "start a tab", the bar puts a hold on a certain amount of your credit, to make sure that you're not trying to buy a bunch of $10 martinis with the last $20 of available credit on your card. It's a guess how much -- it used to be that the bartender had to guess and use the credit card machine manually to put the hold, but now with the widespread use of touchscreen POS systems, the machines do it automatically.

                          Think of it as a "credit check". If you sit down and order a bottle of wine in a group of six people, it's reasonable to think you might order another, so the machine might authorise your card for 2 bottles of wine plus a tip. Notice my choice of words -- while that credit is no longer available to you, it hasn't officially been charged yet and you don't owe the credit card company the money yet.

                          Let's say the wine is $35 a bottle, so they authorise your card for $84 (2 x $35 + 20% tip, because for all they know you might be generous). Then you actually do get the second bottle and they think you might get a third, so they put an additional hold for the next bottle (say, $42). You don't actually buy the third bottle, though, and you tip 15%, so your actual bill is $80.50.

                          Restaurants and bars may process transactions at the weekend but generally they don't post until Monday, and it could be Tuesday if the restaurant is dark on Monday. Thus, you signed the ticket for $80.50 but you look online and you see a hold for $126. You look again on Tuesday after all the charges from the restaurant have been posted, and your $126 is now $80.50, the amount you signed the ticket for. Incidentally, back when we used to have to do this manually, we would increase the percentage of the hold as more was drunk, because as people progress through inebriation they tend to lose judgment about how much they can afford. (At some point, of course, people are cut off due to the illegality of serving alcohol to a person who appears to be inebriated.)

                          The only difference between this scenario and the OP's scenario is that the bill was eventually paid by June, though the hold was taken on Melon's account.

                          Incidentally, if they really ARE trying to charge both accounts, it is certainly illegal, but Melon wouldn't be able to pursue them in civil court (in most states) until one of two things happened: 1) interest started accruing on the "hold" amount -- in which case, if your credit card doesn't give you a grace period, get a different credit card, or 2) the credit card company presents a demand for payment (i.e., a bill). Until that point, technically Melon doesn't owe any money, there has been no damage to Melon, and thus there is no tort. (Fraud, of course, is a criminal matter as well as a civil matter, and the criminality there depends on the state and the laws thereof.)

                          If you think this situation is really that suspicious, you'll want to start paying for all your restaurant and bar tabs in cold hard cash, because absolutely every restaurant and bar on the continent that takes credit cards does this.

                          1. re: Das Ubergeek
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                            Das Ubergeek RE: Das Ubergeek Apr 27, 2006 12:50 PM

                            Oh, and incidentally, if your statement should be generated between the time the hold is placed on your credit and the time the actual charge amount is posted, the hold wouldn't appear on your statement -- holds are never presented for payment, only charges.

                            Car rental companies, by the way, do this all the time, which is why they don't accept debit cards for the initial "security" -- debit cards don't allow "holds" on money that is already in the account. If you checked your credit card the day after you rent a car for a week you'd see at least a $250 or so hold on your credit, more if it's a fancy car, and possibly as much as the rental amount plus a couple of hundred dollars.

                            1. re: Das Ubergeek
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                              Alan408 RE: Das Ubergeek Apr 27, 2006 01:08 PM

                              Between a hotel "reserve" and a car rental company "reserve", the limit on a company credit card was exceeded. Tried to use the credit card in a restaurant and it was declined.

                            2. re: Das Ubergeek
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                              ncchowdog RE: Das Ubergeek Apr 27, 2006 03:40 PM

                              Very well done...I learned something today. With new POS systems the "reserve" against your card is done real time at restaurants (those that demand cards to start a tab)...very cool software.

                            3. re: ncchowdog
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                              Ruth Lafler RE: ncchowdog Apr 27, 2006 12:51 PM

                              I read just fine, thank you.

                              The scenario I gave you was for the "normal" situation, because of what you said about being unfamiliar with this practice and accusing the restaurant of adding a service charge. In the normal scenario, the restaurant is not adding a service charge -- they are *estimating* the tip the customer will leave, so when they place the temporary hold on the funds it's for an amount closer to what the actual total will be. This is all done automatically, BTW: when I say "the restaurant" what I really mean is the software in the restaurant's credit card verification system.

                              I have no idea what the OP's actual situation is -- her own account sounds rather garbled. Hopefully she'll report back in a couple of days once the situation has been clarified.

                              1. re: Ruth Lafler
                                n
                                ncchowdog RE: Ruth Lafler Apr 27, 2006 03:29 PM

                                Ruth, point taken. Thanks for the clarification.

            2. m
              melon RE: melon Apr 26, 2006 03:51 PM

              Thanks everyone! It actually was a weird one. They left my NAME in from the card that I'd put the tab under. When June paid, they charged it to her card but with my name. Then I DID end up getting those funds allocated on my card and it just hasn't gone away yet. In case any of you were tuned in with bated breath. Oh well.

              3 Replies
              1. re: melon
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                ncchowdog RE: melon Apr 26, 2006 04:23 PM

                I would still be suspicious of THAT answer. June gives her card, they swipe it and then YOUR name and account are charged? Stay tuned...this one's not over.

                1. re: ncchowdog
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                  shanabanana RE: ncchowdog Mar 30, 2008 03:20 AM

                  This is what happened: When melon opened the tab she gave HER card. The bartender swiped her card into the POS system, which picked up HER name and card information to run the tab. When the tab was closed the barteneder did not transfer the drinks to a NEW tab under June's name and VOID out Melon's card info. This means that June's card was used to pay Melon's tab and the original info that Melon gave was never VOIDED. This is an easy and honest mistake made by the bartender.

                2. re: melon
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                  pinstripeprincess RE: melon Apr 27, 2006 09:26 AM

                  this sounds far too suspicious... i don't trust places that like to play around with my cc.

                  at worst, if the restaurant won't clear it up then you just call up your credit card company and tell them that you were charged for something you shouldn't have been. it will be up to the restaurant to prove that you signed for that tab, which you didn't.

                  Link: http://tongueandcheek.ca

                3. b
                  BlueHerons RE: melon Apr 26, 2006 03:51 PM

                  I would not email but call and ask to speak to a manager. If you can't get anyone on the phone and if the restaurant is relatively close, I would go to the restaurant between 3PM and 5PM and politely insist this is settled.

                  1. g
                    Gary Soup RE: melon Apr 26, 2006 08:46 PM

                    Your account probably had a "condtional hold" on the tab amount with an automatic 20 percent added to cover a tip. Was it a $64 bill without tip? In any event, the charge should vanish from your account.

                    1. b
                      boogiebaby RE: melon Apr 27, 2006 06:37 AM

                      Because Saturday is not a business day, all charges from the weekend are processed on Monday or Tuesday (depending on when the merchant submits the transactions). That's why Monday you had a hold on your funds.

                      You haven't been charged the $76. A hold was put on your card because your card was the one that started the tab. The restaurant ran your card once you closed the tab because that's the card they had. When your friend decided to pay instead, they ran her card and had her sign her receipt. When the settlement is submitted by the merchant to the bank, your hold will fall off (or it will fall off in 2-3 business days, whichever comes first). Your friend's card will be charged for the bill because that's the card that was settled, not yours.

                      I used to work for a major bank for several years and used to have irate customers come in for things like this all the time. Whenever a credit card or debit card is run, a temporary hold is placed on your funds. This is to ensure that the merchant has first dibs on your money.

                      Many restaurants will run your card for the amount of the bill plus 20% (tip) to make sure you have funds available. Then when you sign and fill out the receipt, that's the amount they are actually able to debit from your account via the settlement.

                      1. r
                        reallyrednails RE: melon Apr 27, 2006 12:02 PM

                        After all this, I still wonder how the restaurant came up with the original estimate of how much the tab would be. Can anyone explain that?

                        1 Reply
                        1. re: reallyrednails
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                          Das Ubergeek RE: reallyrednails Apr 27, 2006 01:00 PM

                          It's all done automatically, with some algorithm in the credit card transaction software that probably takes into account the number of guests, the trend of the bar's liquor sales, average tip, and the time of evening.

                          It used to be (as I posted further down the thread) that bartenders used to have to estimate it themselves, and then it was purely subjective and a matter of experience: "They ordered a $35 bottle of wine, there's six of them, one will probably just drink water or soda, but they look like they're settling in, so it'll be at least another bottle, let me authorise for two bottles plus the tip, so, uh, mathsmathsmaths, $84."

                        2. steeltowngrl RE: melon Mar 30, 2008 10:01 AM

                          You have to be careful when using cards at a bar. Unlike restaurants that do not ask for payment until AFTER you are presented with a bill, bars start running your card as you start ordering. And once you close a bar tab you are presented with a bill that has already been run and if you dispute a charge or the bill is incorrect your card will have 2 charges - 1 that should disappear after a few days (the wrong amount) and the correct charge. I've learned my lesson too many times --- use cash in bars!

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