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 May 14, 2005
Credit Card Surcharge
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When Karen Boutros and her family visited Mama Spumoni's restaurant in Pawtucket, they knew that being a party of eight meant a 15-percent gratuity would automatically be added to their bill.

When Karen checked her account balance online the very next morning, she was shocked to see a charge - not for the 154.31 she had signed for - but 185.17. Karen immediately called the restaurant wanting to know why she was charged and additional 30 dollars. "How could they do that...go and charge for a different amount than what I signed for?"

Good question. Karen spoke with the manager of Mama Spumoni's, Joe Silvestri. He told her this was a standard Visa/Mastercard practice called a "tip promise." Silvestri claims the credit card companies initially charge you an extra 20-percent, just in case you forget to add in a tip. For example, Silvestri says often customers leave the restaurant forgetting to add their gratuity. They call later to have a waitress or hostess add it to their credit card, and that's where this practice comes from. Normally, within 12-24 hours the *correct* amount is charged to your account.

With traditional credit cards, you would never have even noticed this additional charge because it would be corrected BEFORE your monthly statement arrived. But Karen noticed it because she used her debit card and was able to see the charge BEFORE it was corrected. Karen wants others to know about this policy because she says, especially with debit cards, this type of charge can unknowingly putting your balance in jeopardy. "If you go and charge and you think you have a certain amount in the bank and you go ahead and charge something else, you're going to overdraft your account."

Karen says the manager of Spumoni's told her that every restaurant does this..it's a common practice by Visa and Mastercard. When Karen called several area restaurants herself, *most* told her they know nothing about it.

Eyewitness news spoke with both Visa and Mastercard directly. . Neither could give us a straight answer about this practice...only to say they're looking into it. Bottom line, read the fine print in your credit card agreement to see if you'll incur such a charge.

**Since this story aired, we did speak with representatives from Visa and Mastercard who told us this practice is protection for consumers and merchants. They liken it to a paper check not being a guarantee of available funds.  As a result, funds from paper checks can take several days to appear in your account.  Similarly, this credit card surcharge is held for up to 72 hours as well. Visa and Mastercard tell us the surcharge is added at express checkout facilities like restaurants, hotels, and pay-at-the-pump gas stations. The AMOUNT of the held money is calculated by the issuer of your particular card...i.e., your bank. All held monies are required to be reinstated into your account within 72 hours. All of the information regarding this policy and your particular credit card should be in the original credit card contract agreement.

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