My experience recently with Tesco is that the take payment for a delivery when they have already advised the delivery is cancelled. Happened twice in the last month.
I mean, I’m not really sure I feel that much sympathy. If you make a purchase you should expect you’ll have to pay for it. Sure, presentment months later is uncommon (and bizarre, as most companies want their money), but you still made the purchase - it shouldn’t be such a huge shock that eventually it will get presented!
I’d be curious to see what happens when the cards are cancelled and the account completely closed - do they still get the money ?
I see where you are coming from, and in a sense you are right of course. But I still have sympathy. Simply because after three months almost everyone will have forgotten about it. I’m assuming the vast majority didn’t even notice that the payment never left their account, let alone didn’t intend to pay. They simply forgot. And it seems a bit unfair that the customer may have to bear the consequences of the merchant’s mistake.
As I said: technically you are right of course, but there is also the other side, which I can empathise with.
I get this POV but it feels a bit harsh on those poorest people (not scientific but you might guess that most people with close to £0 halfway through the month are not the richest) - they are going to get hit with fees and the only way for them to have known about it would be to either bank with a real-time neo-bank, study their bank statements exhaustively or carry out some sort of reconciliation of their accounts. In the case of any of them then yeah - they should expect a charge to come through and if they don’t have funds available then that’s their fault and they get what was coming. But for the other 95% of people it’s a bit harsh and I don’t blame them for it. I blame Tesco for being terrible and I feel they should reimburse any losses even if within the technicalities of payment protocols.
I’m gonna take this a step further:
Those most likely to be affected by this (in the sense of overdraft fees) are most likley the less well-off. Those who may dip in and out of their overdraft. Experience says that these are financially less savvy. They don’t tend to check their statements religously (maybe because it’s frustrating). They’ll only notice "Oh crap, overdraft charges again " They won’t even notice that the reason was a delayed payment. They won’t have read MSE which states that Tesco has offered to refund overdraft charges to affected customers (implicitly acknowledging that the whole thing was at least partly their fault). And that really sucks!
It’s easy for people like me, who have a house, can pay off my credit card bill in full every month, can heat the house to a comfortable temperature throughout the winter, to forget that (despite not going on foreign holidays every year, not buying a new phone more than once every 5 years, driving a 10 year old car) I am really one of the fortunate ones in this society. That there are loads of people for whom “shall I feed my kids or heat the flat” is a real, regular question. Who (you have probably read) have real anxiety the night that their wages are due to be paid. And that sucks even more!
Cards cancelled shouldn’t matter as I stated before the debit was already authorised by a valid card at the time. They wouldn’t need to try and authorise the payment again. What happens with the closed accounts is a more interesting question.
Tesco apologises after payment glitch pushes customers into red
Surely authorisations don’t stay live for that long?
Don’t funds get removed form available balances if it’s a pre authorisation as well which would remove it as a problem?
Sounds to me more like someone going through transactions that didn’t complete properly and manually putting them through (I could be completely wrong. Do not overly know the process for such transactions )
From what I understand authorizations aren’t actually required to take the money - unless there is obvious fraud an issuer should honor a presentment without prior authorization. Would love to see @RichardR’s insight on this!
Just curious about this issue and if it would have affected Monzo users at all?
In my understanding of the way that Monzo works, your available balance is updated immediately, even though the transaction may not clear for a few days (or in this case - months!). Is that correct?
Does that mean that even if Monzo users had been affected by this glitch from Tesco, they wouldn’t have even noticed?
Would be interested to know!
The authorisations eventually expire and should fall off on Monzo. This is my biggest issue with Monzo, though… it presents authorisations as if they’re real. Thus, I THINK a Monzo user would have thought they got the money back - then been charged it again. When all that happened was the transaction was delayed being presented. Most people love it though, so no sense in complaining, it’s not going to change.
I see. But then, I guess it would be no better with a more traditional card - the user would have just never have seen the transaction on their account until it was finally taken months after?
With Monzo, maybe the fact that it get’s refunded would have been an indication that all was not ok? How would these transactions appear in a Monzo feed? Would the original transaction simply disappear or would a new transaction showing the ‘refunded’ amount appear instead? That would be preferable - maybe it would even be worth Monzo flagging these types of ‘refunds’ to give users a heads up there may be an issue.
At the end of the day - the problem was with the merchant in this case, not the customers bank. Always good to see if there are ways Monzo can help in situations unlike traditional banks. It’s likely quite a rare occurrence but worth considering.
It would have shown for awhile in pending but never in the posted transactions section, correct.
I’m not really sure there is a nice way to handle this. Take for example something I encountered recently
I bought a coke from a vending machine in Brussels. A week late the auth expired and the funds were in ringfenced. Now I think technically at any point in the future forever coca cola can just randomly present and collect the funds right?
Not sure there’s a technically feasible way of handling this with how the system works unless auths are never reversed and if they are presentments aren’t allowed to post. Whatever the solution it would require an entirely new payment processing solution which is never going to happen
Yup, you got the goods, you owe the money.
That would be really, really bad. Far more common than this are authorisations that will never be presented. Any bank that did this would lose all its customers, essentially that would be theft.
Sorry, I should have been clearer. I was trying to imagine an alternate universe version of the card payment network that would have permanent well tracked transactions so that there’d never be this confusion
LOL those are not the real networks of Mastercard/Visa/American Express/Discover/UnionPay/JCB/etc…
Actually, what’s most interesting is how similar all of the above work to each other. Sure, the EMV and track standards are standardised. But things like handling of authorisations and presentments…
The issue is that a lot more merchants are lazy and rely on the auths expiring after a certain period of time instead of explicitly releasing them, so making auths permanent (or last longer) would be very bad.
Look at this thread I made. Now, John Lewis’ general behaviour was unthinkably bad all around (except the very patient and friendly person on the phone - kudos to her!) - the email they sent could have been taken straight out of ‘how to write a phishing message 101’ - but it proves how big of a deal auths can be.