Tesco Charging £120 "Deposit" on Petrol Sales

[Lucan]

Tesco are rolling out a scheme to take £120 from all Pay at the Pump customers, even if they buy less (there is a £100 limit anyway). They refund you "shortly afterwards".

Their claim is to stop people driving off without paying. However, I don't get it - if they can charge you £120 if you drive off, why cant they charge you for the £20 (or whatever) that you actually bought? In any case, wouldn't someone intending to drive off choose the Pay in Kiosk option since that does not require you to insert your card in the pump reader?

People are furious. In many cases it is putting their account in the red. How is this even legal? Suppose I buy a bar of chocolate in a corner shop and the shop "borrows" £1000 from me for a few days? I won't be buying from Tesco in future, not even paying in the kiosk.

https://www.bristolpost.co.uk/news/uk-world-news/tesco-shopper-blasts-crazy-amount-8250639

Tesco's policy is being rolled out at forecourts across the UK due to the rising cost of fuel. It is intended to stop people driving off without paying, or filling their car with more than they can afford.

But the move has been slammed by drivers across the country who accused the supermarket giant of "robbery".

Scott said that despite being assured the money would be refunded to his account quickly, he had been left waiting over 12 hours and still hadn't received the funds.

Tesco explained that the fee is in line with Mastercard and Visa requirements. The company added that the money should be released back to the account immediately but if this does not happen, customers are advised to speak to their bank.

 

[Kite159]

Hasn't this been going on for the last few years in other supermarkets with £99/£100 being ringfenced by the supermarket on the card?

 

[Peter Mugridge]

Hotels do this as well, don't they?

 

[jon0844]

Asda has been doing this (£99) for some time. As soon as you finish, it works out the correct amount and makes the adjustment. As they have a LCD display, it actually says this on the pump which you can read there and then.

Previously it would take £30 and hold it for a number of days before making the correction.. so a £5 fill up left you £25 out of pocket.

I believe that if you don't have sufficient funds to hold £120 for a few minutes, it will attempt a lower amount and then restrict the fill up to that. Tesco pumps in particular have had the ability to set a limit on the pump, so you can just set that and then not have to stare at the display and try and time things right.

I'd file this in the 'nothing to see here' tray, but of course it doesn't surprise me that there are going to be hundreds, if not thousands, of people outraged.

 

[skyhigh]

Hasn't this been going on for the last few years in other supermarkets with £99/£100 being ringfenced by the supermarket on the card?

Yes, absolutely normal and has been going on for years. Effectively they preauthorise an amount on your card and when the transaction is finished the amount gets corrected to the value of fuel dispensed and that money leaves your account. The whole process has been instant in my experience and as the full amount never leaves your bank you won't be charged any interest or overdraft fees.

It works to stop scams (e.g. if you had £100 in a joint account, the card is verified and while fuel is being dispensed someone else transfers that £100 elsewhere and the transaction fails).

If the pending transaction is holding on for days that's either a fault with the merchant or bank. If all pending transactions hold for a few days, just switch bank account.

It really is nothing new or anything to be outraged about.

 

[Bletchleyite]

In the end it's badly reported as clickbait. What they do is pre-authorise £120 (if there's less than £120 in the account I believe it lets them authorise the whole balance and stops fuelling at that point), you fuel, then it reduces that authorisation to the correct amount immediately and bills that. It's kind of comparable to the pre-authorisation traditional hotels do on check-in in case you run off without paying for stuff you've billed to the room (though is rapidly dying out in favour of online prepayment).

There have been very occasional cases where something has crashed half way through and that authorisation has remained stuck on the account, though if you call your bank they should be able to remove it (they may want evidence of the real amount so a receipt would be handy). This is only an issue to people with accounts not allowing overdrafts, as if you are allowed one it will still let you spend (and no, you won't be charged as overdrawn, that's on the actual balance, not pre-authorisations).

It was mostly £99 before, but with fuel prices increasing £99 doesn't fill the tank of increasing numbers of vehicles, so bumping it up to £120 makes sense.

The one thing I think I would change on these pumps is to allow one to optionally select a lower amount to authorise at which the pump would stop. That would deal with basically all of the concerns, and would be easy to do in the pump software. It'd also make it easier for those who like to fuel a fixed sum at a time - some pumps do have buttons to do this but never on the actual payment device.

 

[Ediswan]

In the end it's badly reported as clickbait.

Reach plc again.

 

[zero]

Hotels do this as well, don't they?

Generally only if you want to be able to charge restaurant/bar spend etc. to your room, or if there is a minibar with expensive items in the room.

 

[Mojo]

Not sure why this has become “news” again all of a sudden - this has been commonplace on Visa and Mastercard transactions for several years now.

An independent petrol station near me has just had Pay At Pump fitted in the past few weeks - they go for the USA approach whereby you specify the amount you want in advance of filling, therefore the block placed on your card is only what you have requested. If you end up using under the amount you requested that is returned in due course.

 

[Mcr Warrior]

Not really a completely "new" news story, albeit the amount being pre-authorised does seems to have increased a bit, but suppose the practice could become an issue for anyone whose debit/credit card, like their car, is "running on empty", particularly at "pay at pump" (only) filling station sites that don't have a kiosk.

 

[jon0844]

The thing that has changed is that the higher amount reserved is corrected almost instantly, whereas it has been common to authorise a high amount and hold it potentially for a week or so.

Some supermarkets had lowered the amount taken (see above, with Asda taking £30) but I assume they were then finding it hard to get the remaining amount, so due to fraud they've all worked with Visa, Mastercard etc to find a more workable and fair system.

Sadly Asda still has issues in store where I've paid twice for my shop using my phone to scan, and the payment has failed at the till and yet I've had the charge show as pending. I then have to pay again and the double charge is corrected a few days later leaving me out of pocket and potentially liable for overdraft fees or bounced payments if I didn't have a sufficient balance.

 

[Ted633]

This 'issue' pops up on the local community social page every few weeks, with the usual outrage and spouting of conspiracy theory nonsense as it's gets reported as Tesco physically taking £120 instead of pre-authorising (or they just don't understand what that is).

 

[Bletchleyite]

Not sure why this has become “news” again all of a sudden - this has been commonplace on Visa and Mastercard transactions for several years now.

An independent petrol station near me has just had Pay At Pump fitted in the past few weeks - they go for the USA approach whereby you specify the amount you want in advance of filling, therefore the block placed on your card is only what you have requested. If you end up using under the amount you requested that is returned in due course.

This does seem to be a good approach. The numeric keypad may be tied to entering the PIN only, but you could certainly, with the side buttons, have options like £10, £20, £50, £100, £120 and £150, say.

This 'issue' pops up on the local community social page every few weeks, with the usual outrage and spouting of conspiracy theory nonsense as it's gets reported as Tesco physically taking £120 instead of pre-authorising (or they just don't understand what that is).

It's probably not helped by a lot of modern banks showing preauthorisations as coming off the balance on their apps, like say Monzo does. It's handy in knowing how much you've got left to spend that month, but it can be confusing if you don't understand - some people for instance think that if you have a balance of say £50 and this £120 "comes out" then they'll be charged an overdraft fee - they won't, that only comes when it actually bills.

It would be a problem for anyone without an overdraft facility, though, because they will find payments bouncing. Because even though it doesn't create an actual chargeable overdraft, you'll only be able to authorise up to your balance or overdraft limit.

I can see why some people would find that confusing, particularly with Reach plc spouting their usual low quality, inaccurate clickbait.

 

[Ken H]

If you are in a position where an authorisation of £120 is a problem for you, then go and pay in the kiosk. Then it will only authorise the amount you have spent. The claim comes later, typically overnight.
Or pay cash!

 

[Lucan]

Effectively they preauthorise an amount on your card and when the transaction is finished the amount gets corrected to the value of fuel dispensed and that money leaves your account.

You are describing a system of their checking that you will be able to afford at least up to what is probably the maximum quantity the pump allows (£100 worth at my local). If they have been doing that for years, then it is without the "deposit" (whether £1, £99, or £120), followed by a quick rebate of the unspent balance, ever having appeared on my CC statements. I don't know what would happen if you had only £50 credit left on your card and you only wanted to buy £20 worth, because I have never been anywhere near my CC limit; but there are plenty of honest people who have to live near the knuckle.

However, what I am reading is about people not being refunded for at least 12 hours (see my OP) or, according to a Tesco manager, up to three days. From the Manchester Evening News :

Manchester Evening News

I spoke to a [Tesco] manager who was brilliant but there wasn’t a lot he could do.
"He said it could take up to three days for the money to go back into my account but most people need that money now, it’s not a couple of quid it’s £120."

they go for the USA approach whereby you specify the amount you want in advance of filling, therefore the block placed on your card is only what you have requested. If you end up using under the amount you requested that is returned in due course.

That is an obvious solution, why don't they do it? It is like the olden days, and still at some rural wayside garages around where I live, when an attendant filled for you and you would ask for "Five pounds worth please".

As the "deposit" system only applies to paying at the pump, it is still not explained how it stops people driving off without paying. If someone intended to do that, why would they select Pay at Pump and go through the card routine (only adding more evidence against themselves) when they can simply select Pay at Kiosk, fill up, and drive away?

 

[setdown]

It's the same with the Shell app. When you pay on your phone, before fueling, you can choose a value to authorise and then you can fuel up to that.

 

[jon0844]

If you are in a position where an authorisation of £120 is a problem for you, then go and pay in the kiosk. Then it will only authorise the amount you have spent. The claim comes later, typically overnight.
Or pay cash!

But if it's like Asda then if it can't authorise £120, it will look for a lower amount. So you shouldn't need to go to a kiosk at all (and increasingly petrol stations are unstaffed at night, or in the case of my Asda at all times).

 

[skyhigh]

You are describing a system of their checking that you will be able to afford at least up to what is probably the maximum quantity the pump allows (£100 worth at my local). If they have been doing that for years, then it is without the "deposit" (whether £1, £99, or £120), followed by a quick rebate of the unspent balance, ever having appeared on my CC statements.

It never would. The money does not leave your account and the preauth wouldn't show on a statement. They are simply ringfencing an amount.

I don't know what would happen if you had only £50 credit left on your card and you only wanted to buy £20 worth, because I have never been anywhere near my CC limit; but there are plenty of honest people who have to live near the knuckle.

Then the system authorises the amount available and stops vending of fuel past that amount. It should then correct the authorisation immediately so you could go into the supermarket and spend the remaining £30 on food if required.

 

[stuu]

As the "deposit" system only applies to paying at the pump, it is still not explained how it stops people driving off without paying. If someone intended to do that, why would they select Pay at Pump and go through the card routine (only adding more evidence against themselves) when they can simply select Pay at Kiosk, fill up, and drive away?

Risk. If you drive off without paying, the person in the shop will call the police who may even bother to respond, or will add the reg number to ANPR systems and you could get caught. Card fraud that only gets picked up in head office a few days later is much less risky

 

[Ken H]

It never would. The money does not leave your account and the preauth wouldn't show on a statement. They are simply ringfencing an amount.

Then the system authorises the amount available and stops vending of fuel past that amount. It should then correct the authorisation immediately so you could go into the supermarket and spend the remaining £30 on food if required.

how does that work. when you seek auth you ask for an amount. I am not aware it can say 'I cant auth £120 but I can £50'. But then my CC work isnt supermarket petrol stations.

 

[skyhigh]

As the "deposit" system only applies to paying at the pump, it is still not explained how it stops people driving off without paying. If someone intended to do that, why would they select Pay at Pump and go through the card routine (only adding more evidence against themselves) when they can simply select Pay at Kiosk, fill up, and drive away?

Risk. If you drive off without paying, the person in the shop will call the police who may even bother to respond, or will add the reg number to ANPR systems and you could get caught. Card fraud that only gets picked up in head office a few days later is much less risky

If I'm honest the whole system in the UK needs change, it works much better in the places I've visited in Europe. Pay at pump like we do, or you go into the kiosk and prepay for 20 euros of super unleaded (or whatever you want) and then they activate the pump for that amount only. That would pretty much reduce fuel thefts to nil overnight, but it just doesn't seem to be a thing in the UK.

 

[Snow1964]

If I'm honest the whole system in the UK needs change, it works much better in the places I've visited in Europe. Pay at pump like we do, or you go into the kiosk and prepay for 20 euros of super unleaded (or whatever you want) and then they activate the pump for that amount only. That would pretty much reduce fuel thefts to nil overnight, but it just doesn't seem to be a thing in the UK.

The community petrol station in Hawes (not far from Ribblehead viaduct) is bit like this, there is a card machine by the kiosk where you select a pump and pay, then walk back to pump to fill up. Back in January when I was on holiday there it was cheapest petrol for miles.

 

[Bletchleyite]

If I'm honest the whole system in the UK needs change, it works much better in the places I've visited in Europe. Pay at pump like we do, or you go into the kiosk and prepay for 20 euros of super unleaded (or whatever you want) and then they activate the pump for that amount only. That would pretty much reduce fuel thefts to nil overnight, but it just doesn't seem to be a thing in the UK.

I've used systems like that and they are a pain as if you overpay you get nothing back.

 

[bramling]

Tesco are rolling out a scheme to take £120 from all Pay at the Pump customers, even if they buy less (there is a £100 limit anyway). They refund you "shortly afterwards".

Their claim is to stop people driving off without paying. However, I don't get it - if they can charge you £120 if you drive off, why cant they charge you for the £20 (or whatever) that you actually bought? In any case, wouldn't someone intending to drive off choose the Pay in Kiosk option since that does not require you to insert your card in the pump reader?

People are furious. In many cases it is putting their account in the red. How is this even legal? Suppose I buy a bar of chocolate in a corner shop and the shop "borrows" £1000 from me for a few days? I won't be buying from Tesco in future, not even paying in the kiosk.

https://www.bristolpost.co.uk/news/uk-world-news/tesco-shopper-blasts-crazy-amount-8250639

Don’t really see the issue to be honest. There is a big problem in this country with people wanting / expecting / thinking they have a God-given right to (delete as applicable) goods or services for which they don’t have the funds to pay for. The relatively easy and cheap availability of credit over the last decade and a half has largely encouraged this. I don’t have a problem with businesses doing what they can to try and prevent this.

I notice my energy provider has discontinued the option to pay quarterly, which is presumably mitigation against people running up a big bill and then being unable to pay. Personally I find this irritating, but I can see why energy companies would want to make this change.

I've used systems like that and they are a pain as if you overpay you get nothing back.

I’d be quite happy with a system where one can specify a given quantity of fuel and then authorise the required amount. I’m normally fairly adept at estimating how much fuel I require. I seem to be atypical in filling up based on quantity though, just based on the purely anecdotal evidence of seeing what the previous person did on the pump. But this shouldn’t be a problem as it would be very easy to give people the option of specifying a quantity or price.

 

[skyhigh]

I've used systems like that and they are a pain as if you overpay you get nothing back.

Really? Whenever I've used them there's been the option to go back and get a refund of any overpayment - I've done it myself and I've seen others do the same too.

 

[Bletchleyite]

Really? Whenever I've used them there's been the option to go back and get a refund of any overpayment - I've done it myself and I've seen others do the same too.

Not at the self service ones.

 

[jon0844]

how does that work. when you seek auth you ask for an amount. I am not aware it can say 'I cant auth £120 but I can £50'. But then my CC work isnt supermarket petrol stations.

I assume the industry has come up with a better solution, like TfL (and others) did to allow contactless payment cards to be used for travel, so you won't need to enter a PIN every now and then.

Whereas you may seek to authorise a specific amount in advance at, say, a hotel, I assume the authorisation process for a petrol station is done differently now. Check first for a high amount and allow the full £99, £120 or whatever if approved (petrol stations often have a limit even for cash) - or be rejected and then the bank must now have a way to tell Asda, Tesco etc how much can be spent. That then becomes your allowance.

It's rather like in recent years banks can verify an account with a £0.00 transaction and not 1p or whatever.

 

[Hadders]

Risk. If you drive off without paying, the person in the shop will call the police who may even bother to respond, or will add the reg number to ANPR systems and you could get caught. Card fraud that only gets picked up in head office a few days later is much less risky

Police won't respond to drive offs these days. It's become a huge issue with cars having larger fuel tanks and the price of fuel increasing.

 

[bramling]

Police won't respond to drive offs these days. It's become a huge issue with cars having larger fuel tanks and the price of fuel increasing.

It does seem that this issue could be solved at a stroke by forcing people to pay up front. I guess one potential issue with that it it would reduce footfall in the kiosks, so reducing spend on stuff like confectionery. Personally I take the view anyone buying confectionery on a whim from a petrol station is daft, but evidently people do it.

 

[Hadders]

It does seem that this issue could be solved at a stroke by forcing people to pay up front. I guess one potential issue with that it it would reduce footfall in the kiosks, so reducing spend on stuff like confectionery. Personally I take the view anyone buying confectionery on a whim from a petrol station is daft, but evidently people do it.

Paying upfront causes the issue being discussed in this thread, the pre-authorisation of a set amount. Basically retailers can't win!

The issue will go away over the next few years as electric vehicles start to predominate, although I suspect that will create other cans of worms!