I purchased a few items at a grocery store a few weeks back. When I was going down though all of my monthly purchases I noticed the transaction wasn't there. I got a receipt for the items as well as cash back. The transaction is not in pending transactions or anywhere under payments. I added up my transactions and it is equal to the amount of my payments, so it didn't just get added to the total. Most of my purchases appear under pending almost immediately after purchasing the item and get posted a few days later. I called the credit card and they are not seeing a record of me making the purchase. Did I just not get charged for these items some how?
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1Taking a stab here... maybe you used a different "debit card" instead of a "credit card"? Usually you don't get cash back from a credit card...– TTTAug 23, 2019 at 20:00
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Did you call... the grocery store? (Anyway, put some money aside to pay for it whenever it does show up.)– RonJohnAug 23, 2019 at 20:01
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1@TyDarrod - how did you get cash back from your credit card? Normally that doesn't work at grocery stores. If you definitely did this, what kind of card and bank is your credit card?– TTTAug 23, 2019 at 20:35
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4@TTT I have a Discover card and can get Cash back from the grocery store I go to each week. There is no fee for this cash back.– mhoran_psprepAug 23, 2019 at 22:15
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1Not every grocery store offers cashback with Discover cards, but some large ones do. As far as I can tell, the store (with Discover's approval: the thing does not work with my Visa card) is putting through the entire amount as a purchase amount instead of purchase amount + cash advance, and since credit card companies reimburse the merchant for x% less than the amount being charged, the merchant is eating the fee on the cashback amount since the convenience is a cause of increasing business. The cashback amount is, of course, limited to $100 typically; not the cash advance limit of the card.– Dilip SarwateAug 24, 2019 at 18:12
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1 Answer
It's not that commonly known, but businesses are allowed to do what's called "Stand-in processing" or "Store and forward". This comes up when their connection to their credit card processor is down, but they don't want to just say "No one can pay with a credit card." Instead, their local system can say "I can't be sure that this card is actually valid, but it's low risk so I'll just approve it." (Low risk is defined by the business, and usually involves being under a certain dollar amount, chip cards only, or things like that.)
At a later point, after their connection comes back up, they send all those transactions off to the processor, which goes and hits the your bank for authorization like normal. Under most circumstances, this transaction gets approved, so the customer gets charged, the business gets paid, and it works out the same as normal (albeit possibly a few hours or a few days later than otherwise). On occasion, the card was actually fraudulent, or the customer just didn't have enough credit left, or something else goes wrong, in which case the business just loses that money. (There's also rules around retrying multiple times and various responses, but they're not relevant here.)
The system is generally designed to make it very hard for the customer (or even the clerk) to tell that it's "offline". After all, if you know that the store is down, you can commit fraud much more easily. I have even heard of businesses being offline for several weeks before anyone actually noticed.
To bring it back to your situation, I suspect this is what happened here - the connection from the grocery store to the processor went down, but you did a transaction that was small enough that they were willing to let it happen based on the (high) odds that you were a legitimate customer. Presumably, their connection hasn't come back up and/or they haven't replayed the stored transactions, so your bank hasn't been told about it yet. It should show up eventually, though.
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I will note that while this seems the best fit for the OP's situation, I'm not sure that Discover allows for cash back while offline, which would invalidate this theory. But I don't know one way or the other off the top of my head.– BobsonAug 23, 2019 at 23:10
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Can merchant-side STIP be done with EMV, or does it all have to be fallback? Aug 23, 2019 at 23:33
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@Acccumulation - It's possible, but there's complications. If done correctly, the terminal tells the card "Unable to go online, but I want to approve anyway", the card would approve, and then it wouldn't even be STIP - it'd just be a local approval that the bank would honor. However, US-issued cards almost uniformly say "If I can't get online, then don't allow it." So instead, the terminal can either reply "I got an online approval, but I can't tell you anything else", which the card may or may not accept (and can cause problems when replaying), or ...– BobsonAug 25, 2019 at 1:44
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... or it can say "I couldn't go online, decline." Normally, that'd cause the terminal to display "Declined" on screen, but it's possible to override that. In fact, "Quick Chip", which is where you put in the chip and pull it back out a second later, even while the transaction is still being rung up, requires doing exactly that. Either way, all the chip data from the "go talk to the bank" message is stored and replayed later, and the message back to the chip is discarded (since it's long gone).– BobsonAug 25, 2019 at 1:46