How do restaurants charge your card for the tip if they already ran your card and gave it back to you before giving you the receipt you wrote the tip on?
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One of the teens at our church was charged by the police for ripping off customers at the restaurant where he worked by increasing the size of customer tips. This followed a customer complaint. He was fired but what the outcome of the legal charge was, I don’t know.
Alternatively, I once received an email from my credit card company wanting to know if I had actually given a rather large tip on a meal. It asked, “did you get really good service at such and such restaurant on such and such day, or was this a fraudulent charge”. The tip was legitimate as we had used the restaurant for a business meeting occupying their table for more than an hour while drinking only coffee.
I also got a telephone call from my mother’s credit card company (I had her power of attorney) wanting to know if she bought a snow board and some weight lifting equipment. Seemed an unusual purchase for an 88 year old woman.
So, there are checks built in to the credit card system.
Not sure about all areas but in Canada terminals can be in Pre-authorization mode or final mode.
Pre-authorization usually goes for more than the total. So if $100 charged the terminal just asks the bank “is this card good for $120” and gets a yes or no. The amount is not posted until it is finalized. It can be changed before posting.
Most restaurants and gas stations use this mode. There is also a final mode that most other stores use and the amount cannot be changed.
Credit card transactions involve a few steps – when a card is swiped the first time, that is the authorization step, where the payment system checks with the card issuer to insure the transaction is valid (namely if there is enough under the limit, but there are other checks). That’s the receipt you get with your tip and total lines that you have to sign. The card holder will see a hold on their account for that amount and its not uncommon to have a certain percentage allocated to a standard tip if the merchant is a business that commonly collects them.
The restaurants bank will actually collect the money from the card issuer’s bank much later, as part of the batch process. This is usually done right before the restaurant is closed for the night, typically once a day.
Credit card transactions involve a few steps – when a card is swiped the first time, that is the authorization step, where the payment system checks with the card issuer to insure the transaction is valid (namely if there is enough under the limit, but there are other checks). That’s the receipt you get with your tip and total lines that you have to sign. The card holder will see a hold on their account for that amount and its not uncommon to have a certain percentage allocated to a standard tip if the merchant is a business that commonly collects them.
The restaurants bank will actually collect the money from the card issuer’s bank much later, as part of the batch process. This is usually done right before the restaurant is closed for the night, typically once a day.
Cards are run to check they are valid, they are hit with a holding cheque to ensure money is available for the bill, then when all is said and done the charge is put through at the full amount and the holding cheque is let go.
Do they still have you sign all receipts in the US still? OR have they moved to chip & pin/tap finally?
Cards are run to check they are valid, they are hit with a holding cheque to ensure money is available for the bill, then when all is said and done the charge is put through at the full amount and the holding cheque is let go.
When you run a credit card you receive an auth code. Once the credit card machine is batched they are sent to be finalized.
Restaurants have their own SIC code with the government and depending on that code their credit card processor allows certain configurations for the machine that is built for restaurants (such as allowing tips)
Do they still have you sign all receipts in the US still? OR have they moved to chip & pin/tap finally?
When you run a credit card you receive an auth code. Once the credit card machine is batched they are sent to be finalized.
Restaurants have their own SIC code with the government and depending on that code their credit card processor allows certain configurations for the machine that is built for restaurants (such as allowing tips)
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