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About charges on your credit card statement after a declined payment

Paul Ingraham, updated

This is an annoying ecommerce situation that comes up once in a while. It goes like this:

  1. You try to buy something online, like one of my books. (Thanks!)
  2. The purchase fails. Your card is declined. It’s not clear why. As far as you know, your card is fine.
  3. But then a charge appears on your statement! And you still don’t have what you ordered!

Fortunately, you haven’t actually been charged, despite appearances! The “charge” on your statement is actually a temporary, tentative “authorization” for a charge that will never be confirmed. It will vanish in hours or days. I will never get paid that money, and you will never be billed for it.

What to do

Contact your credit card company and make sure that the next attempt will succeed … and then try again. While you’re talking to them, verify that the “charge” you see on the account is actually unconfirmed and temporary. They may be able to nuke it immediately, or tell you when it will automatically disappear.

The ugly details

This happens because your card company responds to the charge attempt with a decline code initially, but not all declines are outright refusals. Some are more like a “warning,” and a tentative authorization for the charge is generated, waiting for confirmation that usually never comes. (It never comes for some kinds of purchases. But in some cases, it may be convenient for a business to confirm it later.)

These warnings usually kill the deal outright: my payment processor wants nothing to do with charges that are only “maybe” okay. They won’t take the money at that point even if the credit card company gives it a green light. The authorization is doomed to never be confirmed.

So the authorization is then in limbo, and here’s the part that really confuses customers: it often looks just like a real, confirmed charge. On some credit card websites, there is no indication that it’s unconfirmed. My own credit card company does a fine job of visually seperating authorizations from confirmed charges, but many other companies do not! So annoying!

Worst case scenario

I once had a customer whose card company told her the charge was a real charge. Arg! She just talked to the wrong employee, who gave her bad info. But it did disappear from her account a week later.