Paranoia or Something Else? [Δαφνη Ευτυχια Αρθουρος]

I have a debit card with the Visa logo on it; one of those commonplace cards that can be used as though it were a credit card even though it's not.

At the last four gas stations, my card has been declined at the pump, with a "see attendant" message. Last night I went to the booth and the cashier said it was declined. There's enough money in the account right now for a tank of gas (I can't afford to spend that much of it on gas, but there's currently that much there; I was trying to buy two gallons), and the card worked fine at a drug store and a grocery store. At first I thought perhaps the magnetic stripe was getting old and unreliable so the card just worked in some readers and not others, but then I played a hunch ...

At a different gas station, I first tried to use my card at the pump, selecting "credit". It was refused. Then I tried again, pushing the "debit" button instead. I entered my PIN, pumped my gas, everything worked (but I don't remember how much I get charged for a "foreign ATM" fee -- I'll find out on the next statement).

So now I'm curious. Have any of y'all discovered in the past week or two that you can use a debit/credit card in debit mode but not credit mode at gas stations? Am I being unreasonably suspicious, or are gas stations trying to dodge the credit card transaction fee that Visa charges them, by forcing me to swallow the ATM fee instead? Or is it probably mere coincidence that the reader happened to be able to read my card the time I pressed the "debit" button?

I know that several grocery stores changed the programming of their POS terminals about a year ago to default to treating such cards as debit cards, forcing the customer to take a couple of extra steps to use them as credit cards, apparently in the hope that many customers would just go with the prompts on the display instead of asking how to do it the other way. (And I also started seeing adverts in with my statements, saying that using it as a credit card instead of as a debit card would earn me some sort of points or enter me in a sweepstakes or something, because banks and credit unions do want the credit card processing fees from the merchants.) Have gas stations gone a step farther and started playing dirty?

Or am I being to quick to suspect foul play where a flaky mag-stripe may be all there is to it? Anybody else seeing what I'm seeing?

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How much do you have?

The problem is that thanks to drive-aways, the gas stations actually reserve a fee on the credit card - $20 to $30, if I recall correctly - and if you're really low, you may not have enough to cover the hold amount even if you have enough to buy the gas.

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Also, given the rise in prices and probably also drive-offs, they may well have bumped the hold amount up in the recent past.

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Thanks to the "bank of Mom" helping me out, I've got an available balance of ~$150 (with more waiting to clear, earmarked for utility bills once it does).

The first time my card didn't work, early last week, I thought it was the amount of the hold that was the problem, but unless I screwed up the spreadsheet in my PDA, there was enough in the account then as well ...

... unless they've started reserving more than $100 lately instead of $30?

... unless they've started reserving more than $100 lately instead of $30?

It would make sense for them to do that. Figure that some of the real gas guzzling SUVs and mini-vans on the road may hold 20+ gal of gas and at $3+/gal that is a lot of money without looking at the 3.30+ for premium (and expected to go higher).

I believe the Hess in Annandale holds $75, given that, at $3/gal, the previous $25 hold no longer accounts for an entire tank of gas for most folks.

Our van has a 31-gallon tank.

In some cases the reserve is $50 at a gas station. OK, granted that based on what you're driving and gas prices today, that's a tank of gas, but it's been that way for a while at some stations, because of not only the drive-away loss but also the chance that the credit card has been stolen. Credit cards don't process as fast as debit cards. With a debit card, the gas station isn't out the money because the bank has an "OK/not OK" switch of some kind that tells the gas station computer to go ahead with the transcation or kick it back. Visa/Mastercard/Discover/AmEx/etc don't generally do that for that small (relatively speaking) of a transaction. This, at least, is how I understand it works.

And using your PIN at a gas station or a grocery store terminal or some other sales outlet that does that is not the same as using a "foreign ATM". Many banks do charge a small fee for using your PIN (I know that TCF is 30 cents) at a store - a far cry from a $2.50 foreign ATM fee. If your bank/credit union/whatever charges a foreign ATM fee for every store purchase you use your PIN at instead of treating the card as a credit card - change banks, they're ripping you off.

Some banks do not charge a PIN fee - Washington Mutual is one such bank.

Ah. I know that I got charged a quarter for using it as a debit card on a telephone transaction, and assumed that was the foreign-ATM fee. Now I wonder what the actual foreign-ATM fee is ... I'm pretty sure it's not as high as $2.50 though. Yowza.

Chevy Chase dings me $2.00 for every foreign ATM transaction, on top of the $2.00-$2.50 that I get charged by the other bank.

Eesh. Isn't there a less sucktastic option?

Oh, probably, but honestly it's rarely been an issue for me. A big part of the reason I moved my accounts to CC is because this area is lousy with their ATMS -- they're in the two closest airports to me, in lots of the shopping malls, in most (if not all) of the Giant supermarkets, and in the Metro stations that have ATMs. It's rare that I find myself someplace locally where I have to use a foreign ATM.

If your bank is charging you an ATM fee for POS debit transactions, get a new bank. The only time they should hit you for an ATM fee is when you withdraw cash from an actual ATM.

I've been banking with Wachovia for time out of mind, and they've never annoyed me nearly as much as many other banks I've dealt with over the years. And they certainly don't charge me an fee for POS transactions -- in fact, I've been known to go buy something from the grocery store or drugstore just to get cash back and avoid the ATM fee if I'm not near a "home" ATM.

When I paid the overdue portion of my electric bill by phone, using my card as a debit card, my credit union charged a 25-cent transaction fee. But I haven't used my card as a debit card in a store in a very long time (nor have I ever made a habit of it), so my assumptions about the fee may well be mistaken. If an actual standing-at-the-point-of-sale POS transaction is treated differently, as folks here are suggesting is the case, I'll find out on my next statement.

That last time I used my debit card as a debit card in a store, the POS fee was $0.25.

I'll ask Breno about the gas station thing, because AFAIK he always uses his debit card in credit mode.

I should add that the foreign ATM fee is around $2.50.

If you are using it in "buy mode", instead of "ATM mode", there should not be any foreign ATM fee.

Ah -- I didn't realize that. I haven't used it as a debit card much. If it's not going to cost me a quarter to use it as a debit card instead of a credit card, my objection to doing so goes away. (I lose the nebulous promotional points or automatic sweepstakes entry or whatever, but I don't expect those to actually amount to anything tangible anyhow.)

Secondary hint: if you need a small amount of cash and there aren't any friendly ATMs around, go to a supermarket and buy something with the debit card. They'll offer you cash from the debit card without a fee.

(Generally they are happy doing this for up to $40 when you make a small purchase, or up to a hundred or so if you are buying a lot of groceries.)

Shopper's Food Warehouse has no upper limit on 'cash back'; CVS up to $35; Safeway & Giant up to $50.

I used to fret that giving cash back was a burden on cashiers. I later found out that
the situation is just the opposite. When the cash drawer accumulates too much cash,
the cashiers are supposed to "strip" the cash drawer (basically, exchange it with a
fresh one containing a small known amount of money for change making and so
forth). But to do so, they need to get a floor manager or head cashier, which can be
a very slow and frustrating process (accumulating well more than double the "strip"
limit is common). So bleeding off excess cash is often actually doing them a favour.

This really depends on the location.

The Weiss near my home has a limit of $200, the Super Fresh is $100, and the Safeway just asked how much I wanted.

I don't recall the details, but there is a big battle going on between the credit/debit card companies and the merchants over debit cards. The PIN transaction benefits one and the non-PIN benefits the other.

I think there's also some problem with processing dual mode cards, where it's not correctly identified as a debit (or is it credit?) card. My credit union stopped issuing dual mode cards for this reason.

Sorry I'm so fuzzy on the details. I read about this a few months ago and didn't have any reason to pay attention to the specifics.

Yeah. The credit card people (MC, Visa, etc) get a chunk (from the bank) everytime you use your card as a credit card. The bank gets one when you use it as an ATM and pay a fee. It's this big battle over who gets the money. I know some small vendors refuse to take credit cards (or make you buy a minimum dollar amount) because of the fees the cc companies charge for each swipe.

This explains the piece of paper I saw taped to a pump saying "if you want to make a credit card transaction push "no" when you see "Debit Card? Yes/No". Presumably that gas station has changed its default in the POS software at the pump. I find it very amusing to see an instance of corporate warfare emerge right in front of me where I can see it. :3

If anyone cares I believe it was the Exxon near Rips in Bowie MD

Agreed. I believe that if there is a "foreign ATM fee", they're required to post a notice and/or prompt you while you're paying.

I had that problem when I was with NASA Federal Credit Union. Sometimes it wouldn't work as a credit card (even when there was plenty in the account) but would as an ATM card. Sometimes it wouldn't work as ATM, but would as a credit card. It was one of many problems there that made me drop them as my bank of choice.

Two 'noids are better than one.

You should also be very careful about where you enter your pin. There was a report on NPR in the last couple of months (don't remember when, sorry), that said the new trend in ID Theft was coming from people downloading pins and card info off of Debit Card terminals in stores. Grocery stores are often the targets because they don't wipe old info out of the terminals on a regular basis. It makes me glad that I NEVER enter a pin when using my Visa Check card in a store. If they won't take my card that way, I pay in cash or they loose my business. The only time I ever use a pin is in an atm.

In the past, I've often had problems at gas pumps using the card as credit; yesterday, it wouldn't take my card as debit but credit was fine.

This is going to sound strange..I have a card like yours and when I use credit for gas it puts a dollar hold on my account. When I use debit it holds what I have bought. I have a credit union that I work with so that might be part of whats different. When I use an ATM that is not theirs I get the first 6 withdrawels free on the credit union side and then pay 1.00 for each additional one. I do however have to pay any fees that the bank I am using charges. And there are no pos charges.

The last credit hold put on my account when I filled up was $76. In order to stop that, I buy something with my debit card, get cash back and then use the cash to fill up.
I use my debit card all the time and don't rack up much in fees....maybe $4/month at most and that is with dozens of transactions.

Dude... if your bank charges you ATM fees for POS transactions using your debit card, you need to change banks.

Part of the problem at gas stations may be the way they handle credit cards; when you swipe the card, they put a "hold" on the account for the price of an average tank of gas (this is before they know how much you're going to actually spend), in an attempt to guarantee you have enough money to pay for whatever you get. Then when you're finished, they send a message to cancel the hold and charge you x amount of money. If you don't have enough money on your card for whatever they've decided the "average" tank of gas costs, it'll get declined. Plus it can take longer for the 'cancel' order to go thru than the charge, so if you've done a lot of shopping in establishments that do this, it will seem to the machine that your card is overdrawn when it isn't.
Debit transactions ask the bank's computer what your balance is before letting you buy (which is why if you want to buy $20 and your balance is only $15, some pumps will turn off at $14 and tell you no).

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Paranoia or Something Else?

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