Shopping Discussion

Are merchants charged for pre-authorized payment declined?

  • Last Updated:
  • Feb 1st, 2017 7:41 pm
[OP]
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Feb 8, 2006
3721 posts
204 upvotes
Montreal

Are merchants charged for pre-authorized payment declined?

Just wondering how this works internally , it looks to me like this system could be better managed; especially taking into account that pre-authorized payment is mandatory to be a customer of certain services.

If you lose your card and your number changes, all your pre-authorized companies seem to shit a brick if you don't call them to update. My gym charged me a 10$ service fee. My health insurance provider sent me a letter late, 3 weeks after the payment was declined and threatened to close my account if I don't call them right away to arrange payment.

It seems like companies don't know to react rationally to this situation and it's basically a free-for-all as to what might occur.


This is in contrast to companies who operate in a pre-paid fashion, merely keeping your card on file and charge it like a normal payment, in which case they don't lose their damn mind if something is wrong.

It seems like pre-authorized payment is something that you agree to which exposes to you to certain managerial risk, in contrast to other types of credit-card processing.
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