Debit card preauthorisation

redcard

I never use a debit card when a preauth is necessary, but I'm wondering who actually has control of the funds when money has been held from someone's account.

We sometimes have preauth issues at work, and every CS person we speak to always says we need to speak to someone else, or send a fax, or the customer needs to send a fax.

No one can ever give a definitive "It will be released in 3 days".

What's the story?

reclusive46

redcard wrote: »

I never use a debit card when a preauth is necessary, but I'm wondering who actually has control of the funds when money has been held from someone's account.

We sometimes have preauth issues at work, and every CS person we speak to always says we need to speak to someone else, or send a fax, or the customer needs to send a fax.

No one can ever give a definitive "It will be released in 3 days".

What's the story?

The bank still has the money but they basically wait for it to be claimed by the merchants card processing bank. The merchant usually needs to send a fax to the banks authorisation centre telling them that the authorisation won't be claimed upon but many banks won't even allow this anymore.

redcard

So the customer's bank don't have the power to release the funds at the customer's request?

Say if both the merchant and the customer agree the preauth will not be claimed can anyone give permission for the hold to be returned to the customer immediately? I'm thinking of instances were the customer has used their card for preauth then settled their bill in cash.

I've been told to allow from anywhere between 3 and 14 working days for preauths to be resolved.

reclusive46

redcard wrote: »

So the customer's bank don't have the power to release the funds at the customer's request?

Say if both the merchant and the customer agree the preauth will not be claimed can anyone give permission for the hold to be returned to the customer immediately? I'm thinking of instances were the customer has used their card for preauth then settled their bill in cash.

I've been told to allow from anywhere between 3 and 14 working days for preauths to be resolved.

The customers word is never enough but some banks allow it to be removed with the merchants authorisation in some circumstances.

Its a big mistake using a debit card for pre-auth in the first place but pre-authing and then paying in cash is much much worse. This is because when the pre-auth is finalised the original authorisation will disappear and just the final amount will come out but if it is not settled some types of authorisations (Like car rentals) can last 14 days.