Monday, September 5, 2011

No, you can't have petrol. Even if you have enough money.

If you live in America, you'll be used to pay-at-the-pump. It's one of America's greatest contributions to modern motoring. It all but eliminates drive-offs because you can't fill your car without stuffing a credit or debit card in the pump first, and the convenience is second only to drive-through cash machines. But all is not well in this motoring nirvana. First, there's the debit card problem - recently we had a rash of crimes locally where someone had installed card skimmers actually inside the pumps. That's a counterfeiting attack for which there's no defence. So tip number one : if the pump offers you a credit or debit transaction, do the credit one. You don't have to type in a PIN and the transaction is covered under the credit card organisation's anti-fraud clauses, be it VISA, Mastercard or whoever.
But second, and most importantly, there's an financial term you need to become very familiar with. Pre-authorisation. It's a mechanism that is used to quickly determine if you can actually cover the cost of what you're buying. When you swipe your card at a store, the amount runs through the quick-turnaround pre-authorisation system and gives a simple yes/no answer back to the point of sale. At the same time, a 'hold' is placed on your account for that amount. If you go through with the purchase, the hold is turned into a 'pending' amount which will clear at the end of the day. Why all this financial-speak in a motoring blog? Well petrol pumps will ding the account linked to your card with a pre-authorisation amount the instant you swipe it through the card reader on the pump. If it's a true credit card, that's not normally a problem, but if it's your bank card and it's merely using the credit card network to communicate with your bank, it could prevent you from filling up even if you have enough money in your account. Why? The following are the pre-authorisation amounts sent through to your financial institution from a couple of big-chain petrol stations:
Shell: $1.00
Conoco: $1.00
Philips66: $1.00
Chevron: $126.00
Texaco: $151.00
Notice the last two. If you have a hundred bucks in your bank account, and want twenty bucks of gas, don't go to a Chevron or Texaco. The pre-authorisation will attempt to hold more than $100 and because you have less than that in your account, it will most likely reject the amount outright.
If you have more than that amount, you're OK. The actual amount you spend at the pump will become the 'pending' amount and the high-dollar hold value will evaporate at the end of the day.
If you want to see just how quick this pre-authorisation system works, set your bank account to send you an SMS alert if your card is used at a petrol station. Swipe your card through the reader and you'll get a text message before you can get the nozzle of the pump to your petrol tank. That's how quick it is.
For my fellow Brits who live in England, you can probably only try this at Tesco. I don't know of any other petrol stations where they allow you the convenience of paying at the pump.

4 comments:

Anonymous said...

Chris,

Just for info, other non Tesco petrol stations allow you to pay at the pump these days. Morrisons, for example, where the maximum fill up is £120. It used to be £100 but with the price of fuel these days...

Dave

Ars.Gladius said...

Here in Canada, most major gas stations where you pay at the pump, will hold $100 pre auth if you select "fill up". That is on both debit and credit card.

Thankfully they also offer $20, $40, $60, options that only hold that amount of pre auth.

Sometimes the pre-auth can take more then a day to release the unused portion on a credit card here. :(

jeanfromcornwall said...

The local Shell does pay at the pump, here in the east midlands of the UK. I knew there was a reason why I don't use it. Thanks.

Ikram Ali said...

nice