But another tactic is paying with credit cards where the payment is rejected. One tactic that gasoline stations use to counter that is to impose a temporary charge to make sure that there’s enough space on the card to cover the actual cost,
Its not actually charging the card, its blocking that amount of credit out so it can’t be spent on something else. In credit card terms this is called an “authorization”. There’s no actually money be deducted, nor is there any interest accruing to the card holder. Since at the time of authorization, the merchant doesn’t know exactly how much the card holder is going to spend, the merchant usually does an authorization of a fix amount, lets say £75. This lets the merchant know they card holder has enough credit to cover the transaction up to at least that amount.
then to remove it and put the actual charge through after the pumping is done.
Close, they remove the £75 authorization, then set a new authorization for the real amount, let say £36, then they actually charge the card which is called a “settlement”.
I agree with your main point that pre-payment solves this problem of drivers driving off without paying.
Its not actually charging the card, its blocking that amount of credit out so it can’t be spent on something else. In credit card terms this is called an “authorization”. There’s no actually money be deducted, nor is there any interest accruing to the card holder. Since at the time of authorization, the merchant doesn’t know exactly how much the card holder is going to spend, the merchant usually does an authorization of a fix amount, lets say £75. This lets the merchant know they card holder has enough credit to cover the transaction up to at least that amount.
Close, they remove the £75 authorization, then set a new authorization for the real amount, let say £36, then they actually charge the card which is called a “settlement”.
I agree with your main point that pre-payment solves this problem of drivers driving off without paying.
Fair enough, thanks.