Visa recently announce that effective June 18, 2011, customers paying for gas with Visa cards may see a hold of up to $125 whenever they use an automated fuel dispenser. This is an increase from the previous Automated Fuel Dispenser (AFD) hold amount of $75.
What does this mean to me?
Regardless of the amount of gas purchased, the hold could be as much as $125 on your account for up to three days. The actual purchase amount will replace the hold when the merchant processes the sale.
What are “holds” are why are they allowed?
“Blocks” or “holds” assure merchants — not just gas stations — they’ll get paid in full in cases when a transaction is authorized before a final amount is owed. For example, the practice lets a restaurateur accommodate for an additional tip or secures a hotelier against guests trashing a room, wiping out the minibar, or stealing a robe. It applies at gas stations too, because the station doesn’t know how much will be pumped when it allows a sale by credit or debit card at the pump.
The problem is if you get $20 of gas using your debit card at a pump that does not require a PIN, your bank could block out an amount – up to $125– on your card for up to 72 hours, which could result in a cascade of overdraft fees, or simply limit your access to these funds in your checking account.
While the length of the hold is up to your bank, the amount of the hold is up to your gasoline retailer, and each oil company has a different policy. For example Chevron says its preauthorized hold is $1, while BP says it is $75, with varying amounts with Amoco and other large oil companies. To add to the confusion, each bank may have a different policy on the “holds”. Both Bank of America and Wells Fargo claim consumers won’t experience bounced checks and overdraft fees if the block disappears on the same day as they are put in place, however there is a possibility you could suffer from overdraft fees if the hold lasts for more than 1 day.
How can consumer protect themselves?
First, contact your bank and find out their hold policies regarding your VISA issued debit card. Ask how they treat overdraft fees that could occur during this “hold” time. Will they refund those charges, should they occur?
Because only PIN based debit transactions are processed immediately, make sure to always use your PIN at the gas pump when paying with your debit card. If you are not prompted at the pump to use your PIN be aware the hold will go into place. To avoid this, go inside and pay for a set amount of gasoline.
Review your online banking activity after purchasing gas to see the amount of holds placed by the gas station as well as how long it takes for the hold on your funds to be released.