Many consumers enjoy the ease of using debit cards instead of writing out checks. It is easier and faster, and the popularity of the cards continues to increase as checks become less and less common.
However, there are some pitfalls that you should be aware of when you're using your debit card in order to prevent your money from being tied up unnecessarily. There are two particularly common scenarios to watch out for.
Getting Overcharged at Checkout
The way debit card purchases work is that the retailer rings up your sale, swipes your card, receives an approval code, and the bank then puts the amount of the purchase into a "holding zone" until the sale is processed through your account. The bank then deducts the amount from your checking account balance. Everyone is happy—the retailer has a promise of payment, you did not have to show identification because you entered your PIN, and your bank will probably make a small amount from your transaction.
As you gather your packages to leave the store, you suddenly hear an, "Oops!" from the salesperson. She informs you that she overcharged you for an item and needs to correct her mistake. You return your sales receipt to her, she punches in a few things on the register, and offers you a new receipt with the correct charges. Everyone smiles, and you leave to go to the next store.
The Problem With Voiding
When you hear the word "Oops," warning lights should turn on in your head. Any time a debit card purchase is entered, your money is going to be held until the sale is processed. What is happening in many instances is that salespeople are not recognizing the difference between credit card purchases and debit card purchases. What you, the consumer, need to know is that the two are very different, and errors cannot be processed in the same way.
When making error corrections, many retailers will do a "void transaction," which cancels the sale and prevents it from being processed. This system works fine with credit cards, but with debit card transactions, your money is going to be held once an approval code is obtained.
On your debit card, a voided transaction will not be removed until it's released by the retailer, which can sometimes take up to 30 days. That means those funds may be out of your reach for a while.
Mistakes are going to happen, so be prepared and know how to best protect your money for any corrections that may need to be processed. When you're in this situation and a cashier needs to refund a mistake on your debit card, do the following: Immediately, before any other transaction is keyed, ask for a "return" procedure to be completed and not a "void" procedure.
A return will be deducted from your account just as a sale is automatically charged to your account. No waiting period or "holding" of your funds should occur. Make certain that you receive a copy of the return credit from the salesperson. The correct terminology is crucial—inspect your receipt and make certain you see the word "credit" and not "void."
The Dreaded Register Crash
Using a debit card can also cause problems if you happen to be the unlucky customer trying to charge a transaction right when the register crashes. Often the salesperson, trying to offer competent, fast service, will re-ring the transaction when the registers are back up and functioning properly, in order to provide you with a receipt.
But it is possible that your account will get charged twice if no one takes the time to verify whether the sale actually got processed or not. Politely tell the salesperson not to re-ring your transaction. Ask for a manager and get definite proof that the original purchase was not processed. You can also call your bank at that time and verify that no record of the transaction exists.
Remember, any time your debit card is swiped, your account balance is at risk of changing. You should have complete control of what those changes will be. Take the time to read the fine print of your debit card agreement and ask your bank any questions that you may have regarding how the money is held and released.
Frequently Asked Questions (FAQs)
What should you do if you're charged twice on a debit card for one transaction?
If you're charged twice on a debit card, but the retailer immediately voids one of the transactions, then you might not need to do anything. If you don't need the money, and you can wait for the transaction to be fully voided, then you can simply wait. If you need the money soon, then you should ask the retailer to return the funds, rather than simply voiding the transaction. If neither you nor the retailer catches the double charge in time, then you may have to dispute the transaction with your bank.
Do debit card transactions go through immediately?
Debit card transactions don't fully process right away, but there is immediate communication with your bank. The transaction will immediately ask the bank whether the transaction should be allowed to complete, and the bank will either decline or allow it. This will place a hold on the funds in your account, but it may take a few days for those funds to leave your account (although it usually posts within 24 hours).