3

A little bit of context:

  • I did some online shopping.
  • I added some items in the basket for total amount of 770 and payed online with my card.
  • the 770 value transaction was status "pending" on my bank account right after that. It usually takes 3 working days for the bank to actually debit my account
  • today (more than 3 days later) I receive the package with the invoice and a message that some of the items from my order were unavailable so they deducted that from the value of my original purchase. Value of the invoice is 680 (770 - the value of the unavailable items)
  • I check my account and 680 were debited. Which is the correct amount.
  • I do online shopping often enough and this is the first time I see this happened.

Now my question.

How does a pending transaction of 770 gets debited as 680?

Does retailer cancel the initial transaction and start another one? Do they modify the existing one? Is this a special type of transaction? How does it work?

4

A credit card transaction can take place in two steps if the final amount is not known at the time of verification or if there is necessarily going to be a delay between when the vendor needs to know that funds are available and when the vendor is entitled to those funds. In your case, the vendor needed to know that the funds were available before they shipped but were not entitled to the funds until they shipped, so the transaction had to take place in two steps.

The first step is verification, that is, ensuring that your credit card is valid and that the amount they expect to charge is within your limit. A hold is also placed on this expected amount to ensure that the final charge will go through unless something truly exceptional happens. This is what shows as a "pending transaction". This is also sometimes called a "hold".

Later, when the vendor knows the actual amount to charge, they process the actual claim for the funds against the hold. This releases the hold and causes the vendor to be paid the correct amount. The amount specified in this stage can be zero (if the vendor can't deliver the item or you cancel), less than the predicted amount (if the price changes in your favor and the vendor credits you, if you get a discount for some reason, if some items aren't available), equal to the predicted amount (if all goes as expected), or greater than the expected amount (if you added a tip or increased your order).

The purpose of the hold is to allow the vendor to determine that the credit card is valid before the vendor commits to delivering. The purpose of the hold amount is to increase the chances that the final payment will succeed because it can claim the held funds. The relationship between the held amount and the final charge amount can be in any direction depending on what happens between the two events.

3

When you use a debit card or credit card at a gas station they generally put a hold on the account for an amount such as $50 or $75 or $100. The amount may vary depending in the gas station and the card being used. What they end up charging is the exact amount you buy, but the pump cuts off when that maximum amount is hit.

During periods where gas prices were spiking that meant that some people with big vehicles would hit the maximum before they filled the tank. If this happened often enough the service station and card network would increase the maximum amount.

This can also happen when you purchase a meal. When they run the card through the system, they can't know how much of a tip you will leave. The system knows the final amount will be differnt. They have to factor that into the approval process.

I have also had the online vendor split the amount into multiple charges when an item was back ordered, the last part not charged until it could be shipped.

  • All the restaurants where I have paid by credit card have put the exact amount of the bill presented as a pending charge, and later, after I have put on the tip and signed the charge slip (or hit Approve on the card-reader machine), the pending charge disappears and is replaced by the (larger) total amount on the slip I "signed". If there has been an interim period when the pending charge amount gets updated but the final charge has not been processed, it must be overnight between the times that I check my credit-card account (or get notification from the card app on my phone). – Dilip Sarwate Mar 26 at 14:40
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It's called a partial refund.

You can do it yourself. Set up a PayPal account and turn on the vendor feature. Do a retail transaction with it, where you send someone a PayPal bill and/or take a transaction via credit card. After the card has run, you will be able to do a "partial refund" for some of the amount. This is commonly used for reasons just like that, or as a customer-satisfaction adjustment.

  • 1
    A partial refund would show up as a debit of 770 followed by a credit of 90 (two transactions). A single transaction is not the result of a partial refund. – Ben Voigt Mar 27 at 4:45

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