If you want to cancel a pending card transaction, your best bet is to work out the issue with the merchant.
Maybe you’re checking your credit card account and see the evidence of a late-night, online shopping spree: a half a dozen pending charges.
Don’t worry, it’s fairly common. A pending transaction is one that has not yet posted to your account. In the case of your shopping spree, online transactions tend to appear as pending until the merchant actually ships your purchase and bills your card.
If you stayed at a hotel, rented a car or paid for gas using your best credit card, these merchants could also place a hold on your card that appears as a pending charge.
After a transaction posts to your account, you can dispute the charge if you have any issue with the purchase, thanks to the Fair Credit Billing Act. What if you have an issue before the transaction posts and want to cancel a pending card transaction? That is a trickier situation.
How do pending transactions work?
There are several situations in which a transaction may remain pending.
For online purchases, your transaction will frequently stay pending until it’s shipped out. Once it’s shipped, your transaction will be posted. This is because in case your purchase experiences any shipping issues or delays, you won’t be charged for the item until the merchant confirms that the order was successfully fulfilled.
In the hotel industry, when you check-in for your stay, it is a common practice to place a hold for the amount you will owe for the room, plus an additional fee to cover any potential damage or other incidental expenses.
For instance, the hotel would like to be covered in case you dip into snacks and drinks that are not complimentary or damage your hotel room. When you check out and pay your bill, based on the actual tab for your stay, the hold will be removed.
If you pay the bill with the same card that has the hold on it, the card issuer will know that the hold is no longer necessary and will remove it soon. However, if you pay your bill with a different card, or other means of payment, it might take a while for the issuer to know that you have paid your bill and remove the hold.
When you eat out at a restaurant, a pending charge could appear on your card before the final charge replaces it, which will include any tip you add to the bill. And when you pay at a gas station, the business could put a small hold on your card to ensure that you have adequate funds, and this hold will be removed after your transaction is processed.
Note: The monies that are tied up in such pending charges are actually deductions from your available credit limit, and you have to be careful and take them into account to ensure you have adequate funds for other transactions.
That’s why at least one state, Maine, saw fit to pass legislation protecting consumers in such situations. The state requires that businesses that place a hold on your card that exceeds the actual amount of the transaction, clear up such holds to the actual transaction amount within an hour after the transaction is done. This law has teeth, and Maine will fine merchants that run afoul of it.
What is an authorization hold?
The authorization hold, which sits in pending, is so that the merchant knows you have the available funds to cover any charges you may incur. The earlier examples we discussed, such as at hotels, gas stations or restaurants, are considered authorization holds.
Depending on why the authorization hold was placed, it could stay pending for a few days. After the merchant releases the hold, either canceling or processing it, it could take five to seven days for the transaction to fall off or to be posted. If the transaction stays pending for a while and you need access to those funds, you could contact the merchant or the issuer to remove it.
Now, let’s explore different scenarios where you may want to cancel your pending transaction.
When the merchant makes a mistake
If you see two pending transactions, from the same merchant and for the same amount, you could have been accidentally charged twice. You may also have returned a shipped item, but the charge still remains among your pending transactions.
When you see a pending charge that you have an issue with, your inclination might be to want to cancel the charge with your credit card issuer. Unfortunately, card issuers typically don’t allow you to dispute a pending charge. Most of the time only posted transactions can be disputed, as there’s always a chance the merchant could remove your pending charge. In fact, calling them directly is frequently better than reporting the problem to your card issuer as they will be able to help you resolve it faster.
When calling or emailing the merchant, have the related details ready such as the order number, total bill amount and transaction date. You could also print or take a screenshot of the charge information for documentation.
Because pending charges reduce your available credit or bank account balance, it’s best to work with the merchant and contact them with hopes of having them remove the pending transaction before it posts. That way you can free up your available credit.
When you have buyer’s remorse or made a mistake
Going back to our previous online shopping spree example, perhaps you wake up the next day and realize you regret some, or all, your purchases from the previous night. Or, maybe you were still shopping around and accidentally clicked “Place Order” before you’d even decided you want the item.
If you truly don’t want the purchase anymore, try to cancel it right away with the merchant. It’s best to contact the merchant as soon as possible, before the item ships, so that they don’t have to fulfill the item. If the item has already shipped out, you may have to wait for it to arrive at your house before requesting a refund, which is an entirely different process.
In such cases, you should be able to cancel directly with the merchant without any hassles.
When you’re dissatisfied with an item
Consider another possible situation: You bought the armchair of your dreams, a teal cloth one that is the exact size you were looking for. However, when it arrives it doesn’t match the description at all — its color is dark blue and it’s way too big to fit in your reading corner.
When you contact the merchant for a refund, the merchant is unsympathetic and says that the item is ineligible for a refund. What do you do now?
Like the other scenarios, the issuer cannot do much about this purchase while it’s still pending. However, once it’s posted, you could try filing a claim on the transaction under your credit card’s return protection. This benefit will reimburse you for the cost of the item if the retailer refuses to provide you with a refund, exchange or store credit. However, not all cards offer return protection and it is distinct from purchase protection, which covers an item if it’s lost or stolen a certain number of days within the purchase date.
For cardholders without a return protection benefit, you could instead call your issuer and ask for a chargeback. These essentially work like refunds initiated by your issuer, in which your issuer will fight the battle with the merchant about your purchase. If your issuer is successful, you’ll receive a refund.
For chargebacks to work, you must have a good reason. In this case, the product description on the website was misleading. Also, be sure to keep records of your correspondence with the merchant about your refund request, to show your issuer as evidence for your claim.
When you don’t recognize the charge
If you don’t recognize the charge, you should get to the bottom of it before moving to cancel it. It might be a legitimate purchase of yours that you don’t recall, or it could mean that someone stole your card information and is trying to use it.
When you see suspicious activity on a purchase, for example, a large out-of-state transaction that you know you didn’t make or a purchase made at a store that you don’t shop at, you should make every effort to dispute it and get it cleared right away.
If you suspect that a pending transaction is fraudulent, contact your bank and submit a fraud claim, either online or by phone. Oftentimes, the customer representative will report your card as lost or stolen so that the fraudster cannot continue to rack up charges on your account.
Those who suspect their card may be stolen again can set up fraud alerts at one of the three national credit bureaus. After contacting one, it should notify the others. The alert will cause issuers and lenders to ask for additional identification when extending credit in your name.
Pending charges can tie up your funds, making it difficult to use these funds for other transactions. In general, it’s not possible to cancel them while they’re pending. Consumers should contact the merchant to try and sort out any issues, and the merchant will usually contact the issuer to cancel the charge.