When customers use a debit card to pay at the pump, some gas companies and banks put a financial hold on their bank accounts for as much as $75 even though the purchase may have been for much less. The hold is released when the transaction clears, which usually takes only a day or two, but can take up to three business days. During that time, customers are denied access to their money.
Heather Leinen said she ended up with a $75 hold on her checking account after buying $25 worth of gas at a Hess station on Hillsborough Avenue in Tampa. The big problem: She only had $72 in her account. She said AmSouth Bank charged her a $32 fee for insufficient funds and said “there is nothing they can do to help.”
Others told tales of not having enough money to buy groceries over the Labor Day weekend. Several questioned the legality of the practice.
“The purchase price is on the receipt and that is what I agreed to pay/hold against my account,” said Debbie Simpson. “No more, no less.”
All but one of the complaints the Times received involved Hess purchases. Hess blamed the banks, noting they decide to place the hold.
The rotating blame game goes on and on. Whatever. The policy still sucks and, as usual, poor folks get screwed over the most.
When a customer swipes a debit card at the pump, the gas company asks the bank to authorize the transaction and transmits an estimated amount. The most common authorization request is $1, said Chris Roberts, debit products manager for Wachovia Bank. It’s a way for the gas company to be sure the customer has a valid account.
However, as gas prices have risen, some companies have been asking banks for larger and larger authorizations. Hess now asks for $75, which takes all the risk out of the transaction for the gas company.
Thanks to Kate Stone
A $75 hold! Who are these jokers kidding.
This must be a fairly recent development, as I’ve found all my gas station holds in the past have been for $1.00. I’ll have to check new ones and see what they are doing around here in Virginia.
On the “I got mine” side, I’ve had two gas stations around here completely lose my transactions three times in the last year. Yep, basically I got free gas three times because they never charged my debit card at all.
I can’t believe that they can get away with that. If Hess is the one requesting the $75, they should be sued. If the banks are doing it, they should lose their licenses. As far as I know, it is only legal to put a hold on the amount of the transaction. Where’s the Better Business Bureau when you need them.
I work in the oil industry and while I think $75.00 is excessive (especially if there is no notice on the pump) you can blame the people who steal gas for this practice. Most people have no idea how much money gas stations (many of which are independently owned) lose to theft. At many stations this happens daily.
Someone will come in with a pickup or an SUV, authorize the card for $1.00 – $25.00 and drive off with nearly $100.00 in gas.
People who would not dream of stealing a grape from Wal-Mart feel justified stealing gas because it is expensive.
Many municipalities will not even allow a police report to filed for this theft – never mind actually sending the police to look for the thief.
I think the woman who was told by AmSouth that “there was nothing they could do” should find a new bank. I bank with Wachovia and they worked with me when I had a very similar problem.
The easiest solution is to get a debit card with a Visa or Masrtercard logo (check card). The pump will ask you to choose debit or credit. If you choose credit only the exact amount of your purchase will be authorized.
Ganster bankers are out there, what a bunch of crooks….find a new bank lady. Life a scam, and that the way it is…
I used a pump recently that had a sign warnining about this problem. It said that you could avoid the hold by providing your PIN.
– Precision Blogger
The easiest solution is to get a debit card with a Visa or Masrtercard logo (check card). The pump will ask you to choose debit or credit. If you choose credit only the exact amount of your purchase will be authorized.
Of course, that means the credit card companies get their cut, which is why a lot of stores prefer debit.
And why the credit card companies fought to prevent surcharge “penalities” for using credit cards, and “discounts” for paying with cash/debit.
Had a cousin get a $150, yes that is correct, hold on her card. She got $20 in gas. The credit card company said she would have to go back to the station and talk to the mgr to get it removed. Since it was while on vacation, the station was 6 hours away.
She was finally able to talk them into cancelling the hold 2 days later.
If this is happening to you, switch banks! Find a bank in your area that doesn’t rip off their customers. You don’t need the courts to solve every problem. Speak with your wallet and business will listen.
Bill, I don’t know where you buy your gas, but where I live EVERY station makes you pay first, either at the pump or in the store. So I’m not entirely sure how you could pump $25 worth and drive off with $100. If people are doing that, it’s really the stations’ fault. Pay first is NOT difficult to implement.
Bill- Actually its the other way around.
If you use a Debit card with VISA or MC logo, but have them charge it as “CREDIT” you will get the $75 Hold. BUT if you hit the “DEBIT” button and enter your pin number, there is no $75 Hold
The local HESS station recently put notices up at their pumps about this, and how you should use the “DEBIT” button.
Hey Bill, how do you authorize $25 and get $100 worth of gas, every pump I ever went to has a shutoff at the authorized amount.
I don’t use my ATM card for anything other than yuppie cash. I have a VISA with airline miles and pay for everything with that.
RE: The easiest solution is to get a debit card with a Visa or Masrtercard logo (check card). The pump will ask you to choose debit or credit. If you choose credit only the exact amount of your purchase will be authorized.
I heard from a local gas station operator that they are charged $.10 for every gallon purchased using credit and this helps raise gas prices. Another excuse I’m sure, but one worth noting.
Blaming the people who steal gas is absurd – sorry. That’s like imposing a curfew on a city of 10pm (a crazy and knee-jerk solution) and then saying “Hey, blame the criminals, not us law-makers who chose the worst solution to the problem possible.”
If they want to prevent gas theft, there’s a simple solution already in practice. You must pay “before” pumping. Solved.
The bottom line is that when I pay someone for something whether by credit, debit or plain cash, I don’t expect that person to take or control more of my money than what we agreed on. If Hess chooses to do this, then they “must” reveal the practice to the consumer.
And the bank is equally responsible because the customer is basically reporting that a vendor is charging/holding more funds than she agreed to, which is a form of theft/fraud that the bank should address.
Why do people use “debit”? EVERY “debit card” i have seen has the option to act as a “credit” card. You do not have to use your pin, MasterCard or Visa is responsible for the amount, and you don’t have the money taken out of the account because of a hold. Paypal “debit cards” will still take the amount and put it on hold. And if you use it as credit, and you don’t have the money in your account, the worst thing that will happen is you will be declined. Finally, why bother with your pin? It takes more time.
I say go to Mobile/Exxon, get a SpeedPass, and link it to a credit card (or debit card using “credit”). The best way to go! RFID!!
Ed
In the past it used to be $50.00 around here. For several years now I have allways paid inside when using my debit card.
I can see why they do it, what happens if you buy $50.00 worth of gas, then the card doesn’t clear.
might makes right
i was wonderng why the other day i was filling up my Expedition and it stopped at $50. the station i was at obviously uses 50 bucks for their hold instead of 75.
the solution is simple: if you absolutely HAVE to pay for your gas via debit, then do it inside after you’ve filled up (assuming the station allows post pay). the gas staions should just not allow debit at the pump w/o some kind of warning as to what it is doing with your money.
Here where I buy gas in Seattle, I’ve noticed sort of the opposite tactic; gas stations typically charge one dollar to my account immediately, and then adds the full amount a day or two later… I noticed this because I use my paypal debit card which shows charges on their website the second they are made… many credit card companies take a day or two…
I work for a bank which shall remain nameless.
Hypotetically if the bank was placing the holds on consumers cards, we would place a hold for ALL gas purchases (done as credit and not debit) not just Hess. BP, Exonnmobile, Sunoco, etc. would all be the same amount of hold.
The policy to place the hold on consumers cards is the agreement between Visa and the company accepting the purchase. The same is for purchases that you make at restaraunts. They charge your card for 20% more than the bill, to ensure that if you place your tip on the card, they will be paid. Banks have no idea what type of business you are at when you’re using your card. We can’t distinguish, this is a gas purchase, this is a shoe purchase, this is a candy bar purchase.
What the banks ARE responcible for, is the amount of time the purchases/holds are on your account. Many banks hold for 3 days, some banks (including the one I work for) only holds for 1 business day. This policy is good and bad for consumers, depending on what way you slice it. If the funds from a legit purchase are released in 1 day, then you can use that to make another purchase and overdraw your account. If it’s held for 3 days, and you use your card, it will be declined. But if it’s a hold for a larger amount, you won’t have access to those funds.
Sorry for being so long, but I wanted to set the record straight :).
Easy, just don’t buy gas at Hess
The solution is not to do your living and purchasing and banking in the United States. In Canada debit cards have been going full-bore since the mid-80’s. When you make a purchase, the debit from your account is instantaneous. If there are no funds, there’s no purchase. I assume the vendor gets credited quickly as well. The transaction happens in real time.
The reason for this is our relatively centralized system for clearing cheques. The U.S. doesn’t have such a system, and consequently American consumers have to put up with that sort of crap from the likes of gas stations.
Everyone- When you are going start filling up, the pump has no idea how much you will pump. Most pumps authorize $25.00 because until recently this was about the price of a tank of gas for the average car.
If you only have $30.00 in your bank account – the pump authorizes 25.00, then you pump $90.00 worth of gas. The gas station is screwed.
I have seen other notices saying that you should use “debit” rather then “credit” to avoid cash holds but I do not think this is true.
Gas stations (and every other retailer) very much want you to use debit over credit because there are no fees for them. If you use credit they must pay a percentage to visa/mastercard. You will notice that Wal-Mart no longer gives you the option to use credit for a check card. An ATM card with a visa/mastercard logo defaults to debit at every Wal-Mart.
If you use the “credit” option the pump will check to see if you have at least $25-$50-$100 available before it lets you pump but IT WILL NOT HOLD ANY CASH. This has been my experience.
Ima Fish – You must live in a big metro area if every station is requiring pre-pay.
The industry has done hundreds of studys showing that pre-pay significantly reduces average gas purchases (people will guess how much they need rather than fill up) and kills customer loyalty if there are any other stations in the area that do not require pre-pay.
Stations will only implement Pre-Pay as a last resort to theft problems. The major oil company I work with will sell off any station where they are forced to implement pre-pay.
To Blame Game – This may not be entirely the fault of the banks but the banks are the only ones profiting from it. They are in control of the length of the hold – and they recieve $30.00 bounce fees resulting from these holds. Im sure banks nationwide are making hundreds of millions from this practice.
> I heard from a local gas station operator that they are
> charged $.10 for every gallon purchased using credit and
> this helps raise gas prices. Another excuse I’m sure, but
> one worth noting.
If that is the case, then you need to report them to Visa/Mastercard. In their agreement with Visa or Mastercard is a very specific stipulation that they cannot charge differently for purchases made with credit cards. They are *very* strict about this and it is *universally* true. Thus, the next time *anyone* gives you a “credit vs cash” price difference, call their bullshit and tell them that you’ll call Visa/Mastercard about them unless they charge you the lesser price.
Similarly, most businesses will play games to encourage people to use their debit cards. The reason is obvious: the business avoids eating the 4% fee charged by Visa/Mastercard.
Why do gas stations need pre-pay only in the case of debit cards? I can pump and run no matter what kind of financial instrument I (didn’t) plan on tendering.
These gas stations and banks are treating people like sheep: line up here and get fleeced there.
I live in Mass, paid for gas at Hess with my debit card.
I selected credit, and had a $75 hold placed on my acct.
Strangely, I was able to still make a purchase before the hold got removed…and hit with an insufficient fund charge of $27.
Yeah i wish that it was only a 75 dollar thing. I recently purcased gas at a BP and they place a 150$!!! hold. who has ever pumped a 150 dollars worth of gas! this is a bunch of bull!!! and the worst part is i got an over draft charge and no one will do anything about it.
I live in Macon, GA. I used my Visa debit card to get $17 worth of gas at Spectrum. Left there and made a purchase at Wal-greens for $23 (knowing that I had enough money in my account to cover this). I got notification in the mail from my bank that I needed to mail them $23 for a “courtesy fee” because they covered the $23 charge I had made at Wal-greens. I assumed this was an error because I still had money in the bank and hadn’t made any deposits, so how could I have been overdrafted. So I was totally shocked to find out that I didn’t have the money to pay for my purchases at wal-greens because the Spectrum had put a $65 hold on my account when I purchased $17 worth of gas (I didn’t have the $65 in my account). I had never heard of this and went to the spectrum and there is no notification of this policy posted. I had to argue with the bank to get the $23 “courtesy fee” removed from my account, and I will be changing banks also. I don’t know how any of this could be legal.
I put money in my account wednesday to make a purchase on Friday. The problem was I bought gas at Sheetz on Thursday so along with the $20 I spent on gas, they held $100. Now I had no idea of this practice. I went to buy something online and I kept getting denied. I canceled and tried again about 3 times. The bank’s fraud security then put a hold on my card and called me asking if I made purchases. It turned out since sheetz held 100 bucks from me I didn’t have enough to make my purchase. The payment cleared that very same day and its now Sunday night and that $100 is still missing from my account. They don’t have to do this to us. I know exactly how much money I have and I never pump any more. Its no different than paying cash/credit/debit after pumping. At least when we pay before we pump they know who we are incase there isn’t enough to make the transaction.
I was shocked today when I went to check my account balance and saw that there was a transaction for $152.00 I know I didn’t make. I called my bank and it took them awhile to explain this practice to me since I’ve never heard of this before. Thank goodness a deposit was just made into my account, otherwise I would be in the negative figures. I am so upset by this, that I won’t be buying gas at Toms Mobile anymore.