Pre-Authorization on Credit Statement

Double charge, wrong charge, payment, unclear charge

Feature Definition: Credit Card Security

Benefits: By understanding how a pre-authorization works, you will learn why you may briefly see a second charge on your card statement and more importantly, that you will not actually end up paying that value.

 

A credit card pre-authorization is essentially a temporary hold placed by a merchant on a customer's credit card, designed to validate that a card is active. It allows merchants to guarantee the availability of a payment amount for a specific transaction before it is finally confirmed. 

There are several key reasons merchants employ pre-authorizations:

1. Security: Enabling credit card pre-authorization avoids chargebacks because additional fraud checks can be performed while the payment amount is reserved. This reduces fraudulent chargeback occurrences and allows merchants to process payments safely

2. Avoid Fees: Many card processors apply a fee for refunded charges. If the payment hasn’t been captured and processed yet, you can simply cancel the hold and no refund is needed – because the payment was never completed – so no fees will be incurred

3. Customer Satisfaction: It is much easer and faster to cancel a hold on a customers card than it is to issue a refund. This allows us to comp and void customer payments on day of the transaction. 

 

As a customer dining at a GoTab location you may encounter a pre-authorization while opening a tab. If you want to learn more about opening a tab please review this article: https://success.gotab.io/knowledge/open-a-tab.

If you open a tab from the initial landing page as displayed below, your card will be preauthorized for 1$:  

Screen Shot 2021-04-27 at 11.15.42 PM

If you open a tab from the "review tab" page (right before placing your first order), your card will be preauthorized for the value of your initial order plus a default tip determined by the location:

Screen Shot 2021-04-27 at 11.17.03 PM

In both instances, it is important to note that these are NOT double charges or incorrect charges on your account. They will disappear in 1-5 business days and the only remaining charge will be the value of your tab plus tax, fees, and tip.