Pay at pump £1 pre-auth

MamaMoo_2

So, a friend of mine has very stupidly got himself into a bit of trouble. He used his debit card to put £10 fuel in at a pay at pump petrol station. He got excited because he thought he had only been charged £1 for fuel. He assumed the pumps were broken and proceeded to fill up the tanks of all 3 of his cars. Lo and behold, the payments come out two days later, as is standard with pay at pump.
He's now kicking himself and is £50 over his overdraft limit.

Now, after having explained this to him, he thinks it's a very silly system that could ruin people. Obviously, I've pointed out that if you use it properly and aren't silly enough to a) think you've got a freebie and then b) abuse the system, you'll be fine.

It did get me wondering if there were many other places that work the same way (ie pre-authorising a certain sum which gives them the authority to debit up to £99 or whatever), as it is a bit of a unique system that I've only ever seen used at pay at pump.

Obviously there are things like CPAs, but this is obviously different. Like, you wouldn't go to Asda, pay £1 and have them withdraw the full cost of your groceries a few days later, irrespective of whether that money was available.

I've never really thought about it before, as pay as pump is fairly simple to understand IMO, but it does just seem like a strange system, that could catch people out if they don't understand how it works etc. I seem to remember back in the day Asda pre-authorising £100, whether you bought £5 or £50 worth of petrol, which was a pain, but makes more sense I suppose.

Anyway, it's just a musing, and a curiosity as to whether anywhere else operates like that.

glentoran99

Online ordering with Tesco does similar, money doesn't come out when you order it comes out when the shop is done

Futuristic

Authorisations are nothing new and used for nearly all online purchases to verify the card details are correct before actually charging the correct amount. Sometimes vendors will charge a authorisation for the amount due or a simple £1 auth.

Some cases in shops will charge authorisation and then charge the card with the whole days transactions as well for example.

MamaMoo_2

Yes, but in both of those cases the full amount is authorised beforethe goods are handed over, whereas pay at pump only authorises £1 but this somehow gives them the authority to take up to £99 when they collect the sum.
It's this bit which I was wondering whether it happens elsewhere. As, thinking about it, the whole point of a pre-auth is to ensure the funds are there, whereas this doesn't happen with pay at pump

Futuristic

MamaMoo wrote: »

Yes, but in both of those cases the full amount is authorised beforethe goods are handed over, whereas pay at pump only authorises £1 but this somehow gives them the authority to take up to £99 when they collect the sum.
It's this bit which I was wondering whether it happens elsewhere. As, thinking about it, the whole point of a pre-auth is to ensure the funds are there, whereas this doesn't happen with pay at pump

Sadly the pump does not how much petrol you will be filling up. Hence it reasonable for it to take a auth of £1 to validate the card is correct and thereafter charge the correct amount.

I assume once the card is entered, a £1 auth is taken to ensure card is valid. Once petrol has filled up, the actual charge would occur. It depends on your card issuer how long it takes them to update their online banking with the (pending)transaction.

System

Quite a lot of hotels do it to cover meals and other purchases at the hotel

MamaMoo_2

Futuristic wrote: »

Sadly the pump does not how much petrol you will be filling up. Hence it reasonable for it to take a auth of £1 to validate the card is correct and thereafter charge the correct amount.

Yes, totally get this, but when they pre-auth £1, you can fill up with £99 even when you only have £1 on your card, and the bank will still allow that £1 auth to actually authorise up to £99 (as opposed to authorising £99 and then taking off simply what is used).
There is no "pending" charge other than the £1, in my experience, this is only updated when the actual amount is taken, and the full value of the transaction never exists as an authorisation.

The point I'm trying to make is, to my knowledge, this way of working it (ie authorising a lower amount and then deducting, not authorising, a larger amount days later, irrespective of whether there are available funds) doesn't occur anywhere else and is unique to pay at pump. I was merely trying to see if I was correct in assuming that, or whether this happens anywhere else.

20aday

I work in a Petrol Station and our Pay at Pump facility "pre-authorises" purchases for £1 before charging our customers a working day (or so) later for the full amount they've dispensed.

We've had people call into the kiosk/call us up when they've used the facility thinking they've been undercharged (for example they've dispensed £20 worth) but I've explained how it works and they tend to go away fairly happy.

I know Tesco/Asda/Morrisons tell you can fill up to a maximum of £99 when using their Pay at Pump systems.

Futuristic

MamaMoo wrote: »

The point I'm trying to make is, to my knowledge, this way of working it (ie authorising a lower amount and then deducting, not authorising, a larger amount days later, irrespective of whether there are available funds) doesn't occur anywhere else and is unique to pay at pump. I was merely trying to see if I was correct in assuming that, or whether this happens anywhere else.

It is not up to the pump and is no different than a lot of companies to check whether you have enough balance, it will go into your overdraft. I assume if you only had £1 and £0 overdraft limit on the account the card would be declined.

MamaMoo_2

Futuristic wrote: »

It is not up to the pump and is no different than a lot of companies to check whether you have enough balance, it will go into your overdraft. I assume if you only had £1 and £0 overdraft limit on the account the card would be declined.

Nope, this is the point I'm making. If you had £1 available and no overdraft limit, the funds would still be deducted

jonesMUFCforever

Tell your friend to sell one of the cars then pay the funds into his account to repay his overdraft.