Restaurants and Debit Cards

Maybe someone with experience or knowledge of the restaurant industry can help me understand a minor point on how debit cards are handled.

This arises from a situation on New Year’s Eve.  My wife and I went out to a restaurant to eat.  We’ve been there a time or two in the past, but not for a long time.

The meal was wonderful, and as we usually do when we eat out, we paid using my debit card.  As is also usual, I signed for the tip to be added on.

What I’ve noticed happens at most restaurants when I do this is that for the first day or two, the transaction shows up in my register as a pre-authorization and is usually for only the amount of the check.  This makes sense as I’m guessing that the restaurant swipes the card before bringing it back to the table where tip can be handled.  Typically, when the transaction clears after a day or two and appears as a Posted Transaction, the full amount including tip shows up.

Now, with our New Years eve experience, the pre-authorization amount included an additional 20%.  I didn’t tip 20% exactly, but I was able to calculate the difference by looking at the check and the total on my transaction register.

Is this a new thing where restaurants want to make sure you can afford to tip when you get back to the table?

Even though, once the transaction posted a couple of days later, everything was updated to what I had actually tipped, for some reason this bothered me.  What if I tipped less than 20%?  Is the restaurant assuming that I’m cheap for doing so?  What if I had chosen to leave the tip in cash instead, therefore any amount over my check amount was unjustified, and could have caused problems had I not been one to leave a cushion in my bank account?

Any thoughts on whether this is standard practice or what the basis is for a restaurant choosing to operate this way?  It’s not going to stop us from going back, but I’m curious as to whether it would be out of line to comment on this next time we pay.

Thanks in advance if you have any insight.

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3 thoughts on “Restaurants and Debit Cards

  1. I am guessing it is similar to reserving or holding sufficient money for a hotel stay where the total amount is unknown at the time for the credit card authorization. When they get the authorization, it is plus 20%.

  2. Perfectly normal. The restaurant doesn't know how much you are going to tip and hence the pre-authorization.

    You'll notice this when you pay for gas using a debit card. When you swipe, the card company doesn't know how much gas you are going to pump.

  3. I never noticed this, but I usually use my credit card. I do have a friend whose credit card was charged MORE than he had put down for tip. I think the waiter changed the number on the receipt.

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