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Using your credit card at Restaurants


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Not About Food

Using your credit card at Restaurants

deangold | | Feb 8, 2007 05:25 AM

I own a restaurant. The number one reason for customer calls after a visit is credit card issues.

Restaurants these days are in a bind over credit cards.... by law we are not allowed to keep copies of credit card numbers or any other information beyond the last 4 digits of the credit card number and the amount of the charge along with the signature. If you don't want to pay two arms and two legs (we already pay an arm and a leg to the processors, around 3.3+ plus) you have to have your credit cards settled electronically. So we are dependent on our credit card processors.

In addition, these processors add an allowance for the tip to the authorization. Typically this amount is 20%. The reason for this is that the restaurant is only guaranteed the amount of payment that is actually authorized. Permission for your credit card company to do this is clearly stated in your credit card agreement, usually is 5 point type and page 73 after the limitations on warranties that applies in Outer Mongolia. Often it is printed in Latin.

Customers check their card statements online the next day and see a different amount on the bill than is on their charge slip. They then call the restaurant, upset that the restaurant, which in fact has not received any money at this point, has overcharged them. The pending charge will revert to the proper settlement amount in three business days, but the customer is left thinking the restaurant is pulling a fast one.

The other common issue is multiple authorizations to a credit card. From time to time, a server will make a mistake on the credit card authorization process. Then the authorization amount needs to be changed. Our credit card system sends your processor a message with the old authorization number and the new amount. Your processor is supposed to delete the old amount authorized and replace it with the new amount. I have no control over the process from my end. But sometimes both authorizations wind up on your card. Again these is nothing going on from our end that lets us know that this has happened. We can take the same exact steps to correct a mistake and 9 times it works perfectly and then on the tenth time is results in a double authorization. Since only a manager can do this, and I personally handle 60 to 70% of them, there is no rhyme or reason on our side to when this happens. There are a few cases where it is our fault, but that is because someone doesn't follow the proper steps. I am talking about when the proper steps are followed.

If you use a credit card, this temporary inconvenience can result is a future charge being turned down, but will not result in your being over your credit limit as nothing actually counts against your limit till the charge settles. In my almost 2 years of using our system which is Chase, the largest by far, it has never happened that the multiple authorizations have failed to drop off. In any case, having a charge turned down can be embarrassing and very inconvenient, but there is nothing the restaurant can do with regards to your credit card's company's speed in turning pending charges into settled ones. But if you use a debit card, the money is actually taken out of your account and you can be subject to overdraft charges. Never use a debit card!

So here is a summary of my credit card tips...

Don't use a debit card unless you have no other choice and then consider going to an ATM and getting cash. A mistake with a debit card is far worse than with a credit card.

Wait till the end of 3 business days after your dining experience before thinking a restaurant has mischarged you.

Recognize that accidents happen, I cannot tell you the number of times that I or my wait staff has been outright accused of dishonesty..... "That waitress, I guess she just decided to rip me off and add a bigger tip. What are you going to do about it?" Well, if thats how you approach it, I am going to ask you not to come back to my restaurant.

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