Why do some companies pre-authorize debit card transactions?
Gas stations may pre-authorize your card when paying at the pump to make sure your card is valid. Because they do not know what your total purchase will be, they typically do a pre-authorization of $1.00. When the gas station completes its processing, the actual total will be deducted from your account. Restaurants also often use pre-authorizations, which allow you to leave tips using your debit card. Restaurants will often take your card and pre-authorize it for the price of your total bill (or more). Then, when you sign the receipt, you have the option of adding a tip. When the restaurant is completing their processing, they will edit the amount to include your tip. For more information, see the article on Credit and Debit Card Blocking under Consumer News.
