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January 25, 2009

Another credit card question

the towson greene turtleSorry if I'm beating everybody over the head with credit card stories. But I've got one more share. Then, I promise, I'm finished. At least for a little while.

This one's from Midnight Sun reader Liz, who recently had lunch at a local bar/restaurant. She writes:

We attended Purple Friday at the Green Turtle in Towson (pictured) when all the cheerleaders and Raven Employees stopped by for the Titans game.

When we got to the GT we found two seats at the bar, sat down and ordered drinks and food. We didn't recognize the lunch staff, but my husband asked for his drink in his mug. So it was obvious we were regulars since all the mugs sold out about a year and a half ago.

Our total bill came to a little over $25.00 and we tipped $15.00 because the bar tender was very attentive to us in the very crowded atmosphere. The next day when I checked our bank statement, not only was there the to be expected $40.00 charge, but an extra $12.60, AND another $25.00 charge ...

I immediately thought maybe another bar-tender accidentally used our card for another bill. I called them, and the manager explained that they do that to verify the card, and the two additional charges would be removed within 24 hours. They were currently pending on our checking account, which meant the money was debited from our account, but not officially complete. It took 72 hours before the two pending charges were removed, so for the weekend, we had to factor in that "lost" money when making purchases.

I was kind of upset on several things. A) They never told us about any additional charges. B) Why did they have to give us 3 separate charges? C) What If we had only had $50.00 in our checking account, which is probable for most Towson College students in this economy. If we had known about those charges, we would of just paid in cash.

I think it's getting very excessive with all this minimum charges, and frustrating that bars don't tell you this most of the time.

I've never legally looked into it my-self, but I have had friends that have some legal knowledge tell me it's actually illegal in Maryland for business to require or charge a minimum on credit/debit cards.

I was just wondering if any of your other readers have had this experience also.

(Sun photo by Gene Sweeney Jr.)

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Posted by Sam Sessa at 9:23 AM | | Comments (18)
Categories: Bars & Clubs


I don't keep up on my accts enough to really know... I do know I was double-charged (separate amounts each close to 50) for a visit to a local restaurant a while ago.

I called and they re-debited me without any claim of the CC processor or 'early debiting' or it 'happening all the time.'

... I don't know what's up... I just hope it doesn't become common.

the two charges are excessive. usually, in my experiance, it may be one charge to "hold" the card in case the $ isn't there. Which makes o sense to me because if the $ isnt' there, then the charge wouldn't go through. But I would call a lawyer and boycott the GT until they got rid of this ridiculous system.

Can't say that I've had that kind of experience at the Greene Turtle or anywhere else. I bought a mug there during their first week but haven't been back to use it much lately as the crowds kind of get annoying.

My understanding is credit cards don't require a minimum, that business do so because the percentage of the purchase they are charged by the credit card company, which cuts into an already small profit. In theory they shouldn't turn down a credit for any amount because it is outside or in violation of their agreement but they figure people wont complain if it is for an amount under, say, ten dollars.

I have heard that bars and restaurants process a credit purchase amount including the presumed tip then they adjust later to match the actual amount later which can tie up the difference for a few days.

Visa/Mastercard have an extensive agreement form that Merchants have to sign in order to be able to accept credit cards. (OK, anyone can accept credit cards, it's getting the transactions processed and turned into cash-in-the-bank-account that's selective.) Part of that agreement is that the merchant will not set minimum charge amounts.

Know this: Visa/Mastercard and its processors DO charge the merchant for "small transactions". Off the top of my head, I think somewhere between 15¢ and, perhaps as high as 50¢ per transaction under $10.00.

I cannot speak authoritatively about debit cards, since a most of what goes on with them is determined by the issuing bank. ("Policy" can be translated as, "this is what we can get away with") I know that it is a pain, but you need to sit down with someone at your bank (one of those people in an office) and insist that they explain to you what these extra charges are all about. Remember too, that your bank makes money every time you use your debit card. Yes, this is a convenience to you, but it a profit-making business to your bank. Your bank knows what these charges are about.

Merchant agreements do not allow you to use arbitrary dollar amounts for a hold to verify the availability of funds. This is the exact scenario cited by Visa as the reason why they do not allow their merchants to do this to their customers.

If you use a debit card it comes out immediately and most banks charge YOU $0.50 per transaction. But there's no holding or pending charge. It's gone immediately. End of story.

If you use it as credit (or any credit card) the charge is always pending (and the $ gone from your account) for about 3 days. When the charge "clears", it clears at the right amount and all other pending charges drop (or go back into your account). In addition, the person charging you the $ gets hit with the fee, not you.

This is why, years ago, I stopped using my card linked to my checking account and started using a regular credit card with a very high limit. I was tired of $ always disappearing and reappearing in my checking account. It was a budgeting nightmare.

I know all of this because I check all of my accounts religiously (daily).

Many times I have been to a bar and had multiple charges held. Sometimes it's just the one charge, minus tip, then when it clears, it clears with the tip. Also happens at gas stations as I've mentioned before. If you use the credit card machine at the pump, they hold $100 from your account until the transaction clears for the actual amount of gas you got. Right now there are two $99 holds on my card because I had to get gas twice in the same day (don't ask, long story). Eventually those two $99 will be credited back and the actual amounts of $7 and $12 worth of gas that I actually got will come out of my account.

I've noticed more and more of these hold charges/estimated amounts on my debit/credit card showing up lately. My solution has been an increased use of cash in bars and restaurants. It's actually quite liberating!

CantonKate: We're still printing currency? That's crazy! They just ripped the BoA ATM out of my building last week.

I used to bartend at a bar that would put a $50 hold on people's accounts as soon as they started a tab. It was to make sure the money was actually there. I did not agree with this policy as I think $50 is a lot of money for college students/twenty somethings, which was our main customer base.

This has never happened to me and I have been to a lot of bars. I did used to frequent the Camden Pub and they had a sign up saying no charges below $10 - according to someone's post here that was not allowed.

I would not go back to the GT - that sounds like some kind of shady business practice.

Carey - it sounds like you have a horrible bank. Bank of America doesn't do anything like that with their debit accounts.

The consensus in my office is that what happened may not be legal, but it's happened in a few area restaurants that people have been to if the bill is exceptionally. I personally have only had this happen once -- refilling a growler at Duclaw's in Bmore, never been doublecharged at any other location -- and wasn't warned I'd get charged twice. And, agreed, it's really aggrivating.

I own 2 restaurants and a bar. Most don't just arbitrarily charge cards random amounts. When you open a tab at a bar, usually your card is 'authorized' for $25 or so to ensure you actually have the available funds to pay the check. This also attaches your name and credit card info to your check in the computer in the event you walk on your check--wittingly or unwittingly (it actually happens more often than you would think). The problem arises when you use a debit card instead of a credit card. Banks issuing debit cards will take money out of your account for every 'authorization' a retailer runs. An authorization is not a payment--it's essentially a credit check. But your bank will take your money & hold it for up to 3 days, until it can verify whether a payment was made. Restaurants don't actually get your money for up to 3-5 days after your visit. The long & short of it is that you're almost always better off using a credit card or cash than a debit card. And btw: running an authorization for any amount is not a violation of a credit card processing agreement. If you find yourself in Liz's situation, your bank is to blame, not the establishment. Just FYI

I bank at Wachovia and have never had any problems using my debit card. I've never seen any holds for arbitrary dollar amounts when getting gas at the pump.

At restaurants/bars, the original charge appears without the tip. Then, when the transaction clears, it is the correct amount with tip.

This is true both down here in Florida and in Baltimore (and airport restaurants in between), at least in my experience. In the offseason here, you don't even have to give a card to start a tab. I think they start asking for cards when Spring Break starts.

Sam, I think you should write an investigative story on this subject. In my view the main problem is the POS system and the credit card processor. Waiters do not over authorize guests cards. They ring in the items ordered and swipe the card. The rest is in the programming between Micros, Digital Dining, Aloha etc and the processing company. The processors authorize for more than the original amount. Also, for example, with Micros if you split a check with a friend and use two cards... if you're the first card swiped you get authorized for the entire amount. the second card gets authorized for the proper amount. waiters once again have nothing to do with this.

This post has come up a few times lately. In 99% of the cases the bar or restaurant owners or employees have nothing to do with the "overcharge" or authorization. Sometimes mistakes are made and hopefully any reputable bar or restaurant will make good on the mistake.

If you do choose to write a story you should start with Visa and the large processing companies like NPC and also the big three of POS systems (Micros, Aloha, Digital Dining).

Restaurants aren't exactly thrilled about the credit card processing system either. We pay 2%+ of sales to these companies. We are also usually accused of stealing money or having a staff that doesn't know what they're doing when our customers call and complain about these glitches in the cc system. Restaurants spend hundreds or thousands of dollars a month for the convenience of waiting up to 72 hours for the money that was spent the previous night.

Lets bring back the cash!

Am used to having 'credit' extended at any bar for food and drink, until they bring my tab and then I pay. On a quiet night at Don't Know in Federal Hill, friend and I would not be served until we posted a credit card or cash.
We ordeed burgers, one drink. Have been enjoying for years their other bar, No Idea nearby, never a demand for prepay/predeposit. Bartender said he was personally responsible if customer walks out.

Told him that this demand suggested it was a difficult neighborhood with lots of customers stiffing them. And it seemed an unfair labor practice for any bar-owner to hold the bartender employee responsible for a robbery of whatever size. I'm 70, my friend 40, two guys, casual dress, not your typical criminal profile.
Have never had such a demand in over 50 years of pub-crawling.
Is this practice common?
Can barowner hold employees personably resonsible? Even in a rough neighborhood, patrons often know one another and such a 'walk' would be not only un-cool but the patron recognized. Surprised it is not a common practice if there is such a loss on walkers. Federal Hill seems like a trustworthy neighborhood.

This is a common issue with hospitally establisments, especially bars. They run a tab and a "pre-authorization" on your card that freezes that base amount. Once you settle your tab, they send a final amount through their system, creating two charges of different amounts. Multiple charges usually occur when they enter the tip as a separate transaction or charge drinks individually. ALL of the "pre-auths" should fall of your account within 3 business days on average, leaving only the final bill amount including tip. For more info for merchants and how to prevent upsetting customers like this, read more at


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About Erik Maza
Erik Maza is a features reporter at the Baltimore Sun. He writes for several sections of the Sun paper and contributes weekly columns on music and nightlife. He also writes and edits the Midnight Sun blog. He often covers entertainment, business, and the business of entertainment. Occasionally, he writes about Four Loko, The Block, the liquor board, and those who practice "simulated sex with a potted palm tree." Before The Sun, he was a reporter at the Miami New Times. He's also written for Miami magazine, the Orlando Sentinel, the Sarasota Herald Tribune and the Gainesville Sun. Got tips? Gripes? Pitches? He's reachable at Click here to keep up with the dumb music he's listening to.

Midnight Sun covers Baltimore music, live entertainment, and nightlife news. On the blog, you'll find, among other things, concert announcements, breaking news, bars closings and openings, up-to-date coverage of crime in nightlife, new music, round-the-clock coverage of Virgin Mobile FreeFest, handy guides on bars staying open past 2 a.m. on New Year's Eve and those that carry Natty Boh on draft. Recurring features include seven-day nightlife guides, Concert News, guest reviews of bars and concerts, Wednesday Corkboard, and photo galleries, as well as reader-submitted photos. Thanks for reading.

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