Is there a time limit on credit card charges?
June 25, 2020 2:13 PM Subscribe
Is there a time limit by which a merchant must "complete" a credit card transaction? That is, if you sign the receipt on DATE, is there a maximum number of days they have to actually complete the transaction through their credit card processor or otherwise they forfeit your money?
Today I received a charge on my VISA debit card from a merchant in a city where I no longer live, for a transaction date more than six months ago. I am familiar with the merchant, and I have done business with them in the past, but I have no specific memory of doing business with them on that date, and the amount of the charge is implausibly high. I believe this charge to be fraudulent, and it's a large enough amount that it's worth fighting about.
When I contacted the merchant, I was told that they "started" the transaction on my card on that date last year but, through a technical glitch, did not "complete" the transaction until now. They claim not to know how their credit card machine works. I believe this is a cover story for thievery.
I have already cancelled the card to prevent future problems and opened an official "dispute" with the bank that issued the charge, but this raises a question in my mind:
Is there a time limit in which they are required to complete a transaction? Are they allowed -- either by law or by the rules that govern their credit card processing -- to conduct a transaction with me, give me a receipt to sign, etc. but then not actually *make the charge* for more than six months?
A check becomes invalid if it is not cashed within 90-180 days ... is there a rule like that for credit card transactions?
Today I received a charge on my VISA debit card from a merchant in a city where I no longer live, for a transaction date more than six months ago. I am familiar with the merchant, and I have done business with them in the past, but I have no specific memory of doing business with them on that date, and the amount of the charge is implausibly high. I believe this charge to be fraudulent, and it's a large enough amount that it's worth fighting about.
When I contacted the merchant, I was told that they "started" the transaction on my card on that date last year but, through a technical glitch, did not "complete" the transaction until now. They claim not to know how their credit card machine works. I believe this is a cover story for thievery.
I have already cancelled the card to prevent future problems and opened an official "dispute" with the bank that issued the charge, but this raises a question in my mind:
Is there a time limit in which they are required to complete a transaction? Are they allowed -- either by law or by the rules that govern their credit card processing -- to conduct a transaction with me, give me a receipt to sign, etc. but then not actually *make the charge* for more than six months?
A check becomes invalid if it is not cashed within 90-180 days ... is there a rule like that for credit card transactions?
Yeah, that seems like a bad excuse -- so when a credit card is swiped/accepted, all the business gets is an authorization code. At a later time, they have to process the batch (all the auths they got) and run their settlement, which is usually once a day but small businesses maybe do once a week? However, that authorization doesn't last forever, and a the credit card processor (the credit card machine company, not a 'bank' per se) could either just process the batch through anyway without the merchant taking action, or they could delete the batch altogether. Also, the auth that they got when they added the transaction to the batch doesn't last forever, either.
So, if their story is that they didn't batch out for six months and you're getting charged just now? Yeah, that requires a dispute. The business when then have to prove that unlikely scenario occurred, or you get your money back. You may never find out what exactly happened, but they've got a difficult hill to climb to prove the transaction is valid.
It sounds more like they realized they didn't actually bill you for something, and had your credit card on file, so hey why not just charge you now? I'm not sure if the bank will accept that excuse, either, but if they can prove services were rendered but not paid for it might be accepted.
(this isn't related to how checks are handled; the credit card processors have their own rules, your actual bank really doesn't care, it was just told "this transaction happened" and so it recorded it).
posted by AzraelBrown at 3:04 PM on June 25, 2020
So, if their story is that they didn't batch out for six months and you're getting charged just now? Yeah, that requires a dispute. The business when then have to prove that unlikely scenario occurred, or you get your money back. You may never find out what exactly happened, but they've got a difficult hill to climb to prove the transaction is valid.
It sounds more like they realized they didn't actually bill you for something, and had your credit card on file, so hey why not just charge you now? I'm not sure if the bank will accept that excuse, either, but if they can prove services were rendered but not paid for it might be accepted.
(this isn't related to how checks are handled; the credit card processors have their own rules, your actual bank really doesn't care, it was just told "this transaction happened" and so it recorded it).
posted by AzraelBrown at 3:04 PM on June 25, 2020
so I believe you would be able to do a "late presentment chargeback" to the company.
in canada it might be kind of different, but we are required to "close" transactions within 7 days of authorizing them I'm pretty sure, though any kind of payment system I've ever heard of will automatically do it on a schedule. I believe our system at my job automatically closes all open payments every second day.
this page ...seems to agree with me though the language isn't super clear.
They should have an invoice or something for what you're paying for, and they would know the date of the charge. If this somehow happened at my work I would hope the person would agree to pay an amount they actually owe me, but I'd also be understanding that I need to back up this wildly late charge with some facts. I also probably would have contacted the person FIRST to discuss that I forgot to ever charge them for something. So the fact that none of this happened is very suspicious.
a few months ago I had an appliance repair place that I had used in the past charge me $600 out of nowhere and then use the same kind of excuse, and I was able to prove that I had already paid the owing amount back when I had the work done, and that the amount didn't match anyways. They ended up refunding me and acting like they had no idea how it could have happened, but yeah I think it was fraud!
posted by euphoria066 at 3:10 PM on June 25, 2020 [1 favorite]
in canada it might be kind of different, but we are required to "close" transactions within 7 days of authorizing them I'm pretty sure, though any kind of payment system I've ever heard of will automatically do it on a schedule. I believe our system at my job automatically closes all open payments every second day.
this page ...seems to agree with me though the language isn't super clear.
They should have an invoice or something for what you're paying for, and they would know the date of the charge. If this somehow happened at my work I would hope the person would agree to pay an amount they actually owe me, but I'd also be understanding that I need to back up this wildly late charge with some facts. I also probably would have contacted the person FIRST to discuss that I forgot to ever charge them for something. So the fact that none of this happened is very suspicious.
a few months ago I had an appliance repair place that I had used in the past charge me $600 out of nowhere and then use the same kind of excuse, and I was able to prove that I had already paid the owing amount back when I had the work done, and that the amount didn't match anyways. They ended up refunding me and acting like they had no idea how it could have happened, but yeah I think it was fraud!
posted by euphoria066 at 3:10 PM on June 25, 2020 [1 favorite]
Response by poster: @AzraelBrown:
"So, if their story is that they didn't batch out for six months and you're getting charged just now?"
That's exactly it! They say that they didn't know how to work their machine and they literally never did the "batch out" part EVER until yesterday, and then like *three years* worth of transactions all went through at once.
It seems like at some point, the authorization that was created when the card was swiped would have ... expired or something. It seems odd to me that the credit card processor would process an authorization that old. This entire situation just smells fishy...
posted by mccxxiii at 5:22 PM on June 25, 2020
"So, if their story is that they didn't batch out for six months and you're getting charged just now?"
That's exactly it! They say that they didn't know how to work their machine and they literally never did the "batch out" part EVER until yesterday, and then like *three years* worth of transactions all went through at once.
It seems like at some point, the authorization that was created when the card was swiped would have ... expired or something. It seems odd to me that the credit card processor would process an authorization that old. This entire situation just smells fishy...
posted by mccxxiii at 5:22 PM on June 25, 2020
That's breathtakingly awful, since (if true) it means they were without all that money for three years. Did they not have a bookkeeper?
I worked IT for a fairly small sporting goods company and boy, if they had the slightest problem with their credit card system, I was on it in five minutes. Even if this merchant was a sole proprietorship, they must have had a sense of inventory vs. revenue.
Anyway, dispute it hard, as you have already done.
posted by lhauser at 5:39 PM on June 25, 2020 [1 favorite]
I worked IT for a fairly small sporting goods company and boy, if they had the slightest problem with their credit card system, I was on it in five minutes. Even if this merchant was a sole proprietorship, they must have had a sense of inventory vs. revenue.
Anyway, dispute it hard, as you have already done.
posted by lhauser at 5:39 PM on June 25, 2020 [1 favorite]
Having worked in retail I have to say it might not be fishy at all. Semi-trained cashiers doing the end of day closing make errors all the time, especially if the system got upgraded and there was no one to train them the right way to do this. I remember a store with a booklet on how to do these things tucked up beside the cash register and the booklet was about 40 pages thick.
It's possible too that there was not just one purchase made on that date, but half a dozen that add up to the total made on dates prior to the one they chose for putting it through.
If they are a small business they might have been trying to do their own bookkeeping and failing to make it work until in despair they got outside help and the outside bookkeeper found the problem was the result of the improper use of their credit card terminal.
Dispute it and get the poor merchant to give you an itemization. They owe you that after this long time. But don't be too quick to think fraud. It is easy to feel that you shouldn't have to pay after all this time and want to find an argument so you don't have to, but it is far from impossible that you did indeed run up those charges and they were indeed incompetent enough to leave their merchant account un-reconciled for almost a year. I suspect June 30 is their end of year and that's why they caught it and put it through now.
posted by Jane the Brown at 6:55 PM on June 25, 2020 [1 favorite]
It's possible too that there was not just one purchase made on that date, but half a dozen that add up to the total made on dates prior to the one they chose for putting it through.
If they are a small business they might have been trying to do their own bookkeeping and failing to make it work until in despair they got outside help and the outside bookkeeper found the problem was the result of the improper use of their credit card terminal.
Dispute it and get the poor merchant to give you an itemization. They owe you that after this long time. But don't be too quick to think fraud. It is easy to feel that you shouldn't have to pay after all this time and want to find an argument so you don't have to, but it is far from impossible that you did indeed run up those charges and they were indeed incompetent enough to leave their merchant account un-reconciled for almost a year. I suspect June 30 is their end of year and that's why they caught it and put it through now.
posted by Jane the Brown at 6:55 PM on June 25, 2020 [1 favorite]
Depending on their card processor, they may be limited in how long they have to process the charge. We use Stripe, and our agreement requires that we ship merchandise and charge the card within 7 days of the sale, or we lose the approval to use the card and have to get re-authorization (for example, if an item is out of stock, we have to actually contact the customer before we can put that charge through when the item is back in stock). I don't know how you'd find out who their processor is, but it's entirely possible that this is not allowed in the terms of their agreement. That might be an angle your bank could take on your behalf. But if you are based in the US, you have more limited protections from using a debit card than a credit card, so I wouldn't expect that they will jump through a lot of hoops for you.
posted by peanut_mcgillicuty at 7:47 PM on June 25, 2020
posted by peanut_mcgillicuty at 7:47 PM on June 25, 2020
I haven’t been in the payments biz in a while, but I am still confident the merchant is extremely full of shit.
The auths at the processor I worked for were only good for 7 days. After which they would “fall off” and any captures (that’s the process where the money actually moves around, usually in the middle of the night) would fail.
I can practically guarantee they did an audit and realized they had fucked the processing of some orders (they must be real morons to think you’d believe they’d go THREE YEARS without getting any of their money), and now they are pretending that you, and everyone else they charged this week, just showed up to place new orders. Needless to say, that is an extreme no-no. In fact, I would bet good money their processor has already started the process of firing them as a merchant.
It’s popular belief that Visa/MasterCard and/or the banks are ultimately on the hook when credit card changes go bad, but that’s not true. It’s the processors (the company that gives the merchant their machine and handles the actual moving around of money) that are. So, when a merchant does dumb shit (like running a card months after the transaction and lying to their customer about it) they tend to be deemed too risky to keep as a client.
posted by sideshow at 10:01 PM on June 25, 2020 [2 favorites]
The auths at the processor I worked for were only good for 7 days. After which they would “fall off” and any captures (that’s the process where the money actually moves around, usually in the middle of the night) would fail.
I can practically guarantee they did an audit and realized they had fucked the processing of some orders (they must be real morons to think you’d believe they’d go THREE YEARS without getting any of their money), and now they are pretending that you, and everyone else they charged this week, just showed up to place new orders. Needless to say, that is an extreme no-no. In fact, I would bet good money their processor has already started the process of firing them as a merchant.
It’s popular belief that Visa/MasterCard and/or the banks are ultimately on the hook when credit card changes go bad, but that’s not true. It’s the processors (the company that gives the merchant their machine and handles the actual moving around of money) that are. So, when a merchant does dumb shit (like running a card months after the transaction and lying to their customer about it) they tend to be deemed too risky to keep as a client.
posted by sideshow at 10:01 PM on June 25, 2020 [2 favorites]
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