Originally Posted by
LuvAirFrance
In their never-ending search for new fees, banks have taken to covering debits that overdraft an account and charge a "convenience fee" for doing it. Which means less refusal of debits. That may have the consequence of debit cards being more risky. If banks were less hungry for fees, they'd simply refuse to authorize a charge that exceeds an account balance. That'd really be better for merchants.
All I can say is I've seen MANY debit cards decline for charges that are due...
Originally Posted by
LuvAirFrance
As for the prepaid, my theory was that the magnetic strip kept track of remaining balance. If they are actually sending an inquiry somewhere, and that somewhere updates on a batch basis, a card owner could overspend before the balance is updated. I've only used gift cards, never prepaid Visa or Mastercharge, so I can't say if the receipts show a remaining balance. If they can calculate the balance, then it should be safe for the hotel to take them.
Some private-label gift cards at some vendors may work this way, but the Visa/Mastercard-branded ones do actually go out and seek real-time authorizations. The issue isn't with charges not being honored--it's when the customer owes more money (usually after the fact--when they've already gone) and the prepaid card declines. At LEAST with a debit card, there's a chance that the person may deposit more money in their account, so the merchant can keep trying and eventually get the bill paid. With a prepaid card--once it declines, it's absolutely useless.