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This is nice in theory. I think this doesn't happen because when you take people's money they're suddenly your "customers" and think they're entitled to a phone ASAP and if there are any unexpected delays you have upset the hoard. As soon as you take someone's money, they're a customer support liability.

It does not seem to cause any problem to Amazon, Apple, or the vast majority of other shops out there. The biggest shop debit your card when they ship and let you cancel at any time.

Google is crafting buzz like Apple is doing with the queues at the Apple store or their irritating "reserve your iPhone" that in reality does not reserve anything. A difference though, if you don't want to bother, you can simply order online and it get it delivered the old boring way once it is back in stock. The Nexus can only be bought online.

(disclaimer: a bit bitter after having tried to buy a Nexus 4 today)

On the other hand, why not just wait a week 'till all the fervor is over. If you're cool-headed enough to realize this is all to build buzz, then surely you can wait a week.

That would be fine if Google made an announcement that they expect to take orders again in n weeks.

Your assumption is that Google is doing this to build buzz.

They could just as well have component supply problems.

This! Google just recently saw this happen with the Nexus 7 this summer. People were charged when they preordered and then the lack of a hard ship date caused Google to have to spend countless hours in customer support. Once somebody has paid you, the can of worms is open.

They could also want to control the amount of unearned revenue on their books.

The concept of "we charge your card when the product ships" was invented how many years ago? It sounds like Google is retrofitting physical products into a store that was never meant to handle them.

A backlog of orders pushes back your shipping date by two months. One random day you get an email saying "Your item has shipped and your card has been charged". Is it not plausible that you've found an alternate in the meantime? Or that your financial situation has changed?

Even if they only take a hold to ensure the funds are on the card, many (most?) banks won't tell you that the money wasn't charged yet, and they'll make it unavailable.

Then why don't they just charge the card before they ship... and if that fails then they send you an email saying so, amend your details within 48 hours or it ships to the next person in line.

Not exactly difficult.

...and if they semi-randomly charge someone over their credit limit or overdraft their bank account, or someone forgets entirely that they signed up and submits a chargeback?

"many (most?) banks won't tell you that the money wasn't charged yet"


I can log in to any bank and it'll tell me within a few moments of when a charge was made.

> I can log in to any bank and it'll tell me within a few moments of when a charge was made.

No you can't; that's exactly the issue. Most people don't know the difference between an authorization and a charge. What you see on online banking as "pending charges" or "holds" are authorizations. No money has moved hands -- your bank balance has not gone down, the merchant's bank balance has not gone up, there's not even an in-flight ACH somewhere yet to be processed.

Literally all these entries on your online banking represent is a message of intent from the merchant to charge that much to your card in the near future. Even your bank does not yet know if the merchant actually captured the funds and they'll be settled (the money will move) soon or if they only performed the authorization. They could void the authorization or let it expire itself without ever charging the card.

Hence the comment -- even if Google only performs an authorization, it looks to the customer like they paid, and the bank won't tell the customer otherwise. That makes using authorizations to hold preorders untenable from a customer service standpoint even if it were technically possible, which it really isn't due to the short period authorizations are valid outside the hotel, travel and rental industries.

My bank, ING Direct, lists authorizations and charges in completely separate areas when you login. Authorizations first, then charges.

Our banks all work the same. The settled transactions list you're talking about does not update "within a few moments" as the comment I was replying to said, if a charge was even made.

The fastest your bank could possibly show a charge I make to it right now is tomorrow. Most will take longer than that. If it's near a weekend, it could take 3 or more calendar days. The authorization can show up immediately, the charge cannot.

Authorizations happen in real-time over the card networks. Settlements, where the charges get recorded and the funds actually move, happen in daily batches (or even less often).

In the meantime, customers assume they have paid for something, because they see it in the pending charges or holds list, whether funds were captured or not. Again, refer to previous comments on why that makes authorizing cards for the full amount of preorders problematic.

Holds usually only last for a week, tops.

Pretty much.

If you're running a brick and mortar store, you want to serve the customers who are there now. That means not cannibalizing your inventory by mailing to someone who ordered last week. You also want people to come back to your store.

It is irrational for the store to mail you one when it comes in stock, though they should have a web-based corporate distributor that they can direct you to.

Some business charge customers only when the product is shipped.

In Denmark thats the law. Its illegal to charge the customer, if you haven't shipped the product.

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