20% added to restaurant bill?

johnisworried

Hi, I recently used a currency card in the USA to pay for a meal. I tipped in cash, yet the restaurant held a further 20% of the bill for three days.

They've told me this is normal. I've not seen it with other restaurant charges on my online statement though.

Don't the restaurant have to tell me this is going to happen? In case I am relying on the funds for other use?

BritAbroad

I live in the US, and this is fairly normal. Most people in the US add the tip to the credit card receipt. When the card is charged, it's usually pre-authorised for an amount over the actual bill. The customer then writes the tip and total on the card receipt and the bill is closed off with that amount. It can take a few days for the difference to reappear on the account.

The same thing also happens with petrol in the US - the card will be pre-authorised for, say, $100. You only put in $75, and the balance will be corrected over the next couple of days. You're not actually charged $100, it's merely that the sum is put on hold for a period, so you may not have access to that $25 difference for a couple of days.

This doesn't just happen with foreign credit cards, it also happens with US-issued credit and debit cards. Banking in the US is a little antiquated. Just check your balance in a few days. For future reference, if you're tipping cash, I'd write 'cash' on the tip line of the receipt and then the total being charged to the card to avoid any skulduggery on the part of the restaurant. It's rare but does happen occasionally.

pelirocco

This practice can cause big problems , especially if you use a preloaded currency card , I have heard of cases where it has taken 10 days for this 'ghosted' amount to clear from the card .
If we use a card will always make it clear we will be tipping in cash and not to add it to the bill , but we try to use cash in restaurants in the US where ever possible

johnisworried

But do the restaurant need to tell me they're doing this?

johnisworried

Bump. ******************************

dalesrider

No they don't need to tell you. As its standard practise.

Another example of this is pay @ the pump. In the UK you will see a auth for £2 and then it debits for the full amount. Go into Europe and it will auth for the max you can have £100 and then debit for the correct amount....
Can cause a lot of issue for people running close to the wind.

10 working days is a standard for auths dropping off. The issue is that debit does not match the auth, so they do not auto cancel each off sooner.

missile

I notice more people use cash than credit card overseas. Possibly to avoid this practice?

dzug1

missile wrote: »

I notice more people use cash than credit card overseas. Possibly to avoid this practice?

Well maybe but more likely they know their CC charges them a percentage, coz it's now on their statements, they know that the PO and the like charge NO COMMISSION and hence think it's cheaper because they don't know (never having been on this site) to check the exchange rate as well

dalesrider

missile wrote: »

I notice more people use cash than credit card overseas. Possibly to avoid this practice?

No. As it is the way the system in that country works. It would be just the same on a debit card.

dalesrider

dzug1 wrote: »

Well maybe

charge NO COMMISSION and hence think it's cheaper

to check the exchange rate as well

What has happened has nothing to do with any commission charge or exchange rate.
It is to do with how the retailer processes the authorisation.