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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.

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