Hotel "incidentals" credit card precharge?

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Watty
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Hotel "incidentals" credit card precharge?

Post by Watty » Mon Oct 28, 2019 11:35 am

I have been on the road in the US the last two weeks and twice I have been at large well known midrange chain hotels where they have a mini-store at the front desk where you can buy various food and travel items. They may have also have had pay per view options on the TV. I never use either of these.

When checking in they both added a precharge to my credit card of around $100 for three+ night stays that will be refunded to the credit card after I check out. This is to cover any purchases I might make at their min-store. It was not a non-refundable "resort fee".

To be clear this was a credit card and not a debit card.

This was an actual charge and not just a credit hold.

When I get home I will sign on to my credit card account to check that the refund was actually made and dispute any problems so I am not worried about getting stuck with the extra charge

This is the first time I have run into this and these were well known chains so I did not raise a fuss but I was wondering if other people have run into this and how you handled it.

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goingup
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Re: Hotel "incidentals" credit card precharge?

Post by goingup » Mon Oct 28, 2019 11:43 am

Yes, I got a $100 charge for incidentals when checking into a Hampton Inn a couple months ago. It was an actual charge that appeared as "pending" on my account for several days until it disappeared. I figured it's a way for Hilton to float some money at my expense. Pretty annoying.

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ResearchMed
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Re: Hotel "incidentals" credit card precharge?

Post by ResearchMed » Mon Oct 28, 2019 11:48 am

Wow.

Haven't heard of that.

We've had "holds" put on our credit card, but not actual charges, other than the actual room charge, and then anything actually purchased.

RM
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Re: Hotel "incidentals" credit card precharge?

Post by AerialP » Mon Oct 28, 2019 11:51 am

I am a "roadwarrior" across North America and spread my stays almost exclusively among three major hotel families/programs: Hilton Honors, IHG (Holiday Inns, etc), and Bonvoy (Marriott/SPG).
This incidentals pre-charge, which floats on my credit card as "pending" until check-out, is very standard practice and has been for over 5 years that I can recall.

anon_investor
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Re: Hotel "incidentals" credit card precharge?

Post by anon_investor » Mon Oct 28, 2019 11:53 am

I used to travel a lot for work, and I think this is pretty common. At least for me, none of these kind of hotel pre-charges ever posted, they only ever showed up as pending on my credit cards, but yes they did count against my overall credit limit. Personally, that has never been a big issue for me since I never come close to reaching my credit limit, but I can see how that may be a problem for some people...

diy60
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Re: Hotel "incidentals" credit card precharge?

Post by diy60 » Mon Oct 28, 2019 11:59 am

Seems to be pretty common these last several years. Charges show up on my card separately from the room charges, linger on "pending charges" for several days and then drop off. I've never had an issue with the charges wrongfully sticking. Doesn't cost me anything but the practice does bug me. Reminds me of back in the day when gas pumps charged $99 "pending" no matter how little gas you purchased.

sfnerd
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Re: Hotel "incidentals" credit card precharge?

Post by sfnerd » Mon Oct 28, 2019 12:03 pm

goingup wrote:
Mon Oct 28, 2019 11:43 am
Yes, I got a $100 charge for incidentals when checking into a Hampton Inn a couple months ago. It was an actual charge that appeared as "pending" on my account for several days until it disappeared. I figured it's a way for Hilton to float some money at my expense. Pretty annoying.
They don't actually receive any money until the charge is finalized. Even after the charge is settled, it still takes them a day or two to get the money, at best. So really they don't get any float.

These charges are purely to ensure you can pay if you leave without paying / checking out.

If the charge appears to be settled (charged) and not just authorized (pending) it is likely that the merchant just has a system that authorizes and settles at the same time. They can refund the charge later.

Most companies just authorize, then they settle after, because this may save them money on CC fees if the customer doesn't end up spending money in the hotel. However, in your case the hotel chain probably negotiated so that they don't pay fees for refunded transactions.

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Re: Hotel "incidentals" credit card precharge?

Post by TropikThunder » Mon Oct 28, 2019 12:07 pm

Watty wrote:
Mon Oct 28, 2019 11:35 am
This was an actual charge and not just a credit hold.
More likely it’s just a pending charge, which is exactly how a hold works. That’s pretty much how it’s always worked in my experience, for rental cars as well, as a way for the business to know the card is good and will potentially accept an estimated incidental fee. They usually say in the fine print that they’ll apply a hold, and the hold will reduce your available credit on that card. It takes a couple days for a valid charge to go from Pending to Posted, but for holds they just don’t complete (don’t post) and fall off when they expire since the business doesn’t complete them. I’m curious to know how you can tell it’s an actual charge unless you’re staying at the hotel long enough for it to actually post.

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Re: Hotel "incidentals" credit card precharge?

Post by stan1 » Mon Oct 28, 2019 12:12 pm

AerialP wrote:
Mon Oct 28, 2019 11:51 am
I am a "roadwarrior" across North America and spread my stays almost exclusively among three major hotel families/programs: Hilton Honors, IHG (Holiday Inns, etc), and Bonvoy (Marriott/SPG).
This incidentals pre-charge, which floats on my credit card as "pending" until check-out, is very standard practice and has been for over 5 years that I can recall.
My experience as well. Never had a problem with this pending charge being turned into an actual charge.

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Re: Hotel "incidentals" credit card precharge?

Post by Watty » Mon Oct 28, 2019 12:19 pm

TropikThunder wrote:
Mon Oct 28, 2019 12:07 pm
Watty wrote:
Mon Oct 28, 2019 11:35 am
This was an actual charge and not just a credit hold.
More likely it’s just a pending charge, which is exactly how a hold works. That’s pretty much how it’s always worked in my experience, for rental cars as well, as a way for the business to know the card is good and will potentially accept an estimated incidental fee. They usually say in the fine print that they’ll apply a hold, and the hold will reduce your available credit on that card. It takes a couple days for a valid charge to go from Pending to Posted, but for holds they just don’t complete (don’t post) and fall off when they expire since the business doesn’t complete them. I’m curious to know how you can tell it’s an actual charge unless you’re staying at the hotel long enough for it to actually post.
I get text messages whenever there is a charge to my account and at least for the first hotel I got text messages that there was a charge. I am not sure if I would have gotten a text for a pending charge or not.

The other costs for that hotel stay were prepaid so the amount was just for their incidental precharge.

For the second stay the charge that I signed at check in was 15% higher to cover potential incidental charges.

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Re: Hotel "incidentals" credit card precharge?

Post by TropikThunder » Mon Oct 28, 2019 12:27 pm

Watty wrote:
Mon Oct 28, 2019 12:19 pm
I get text messages whenever there is a charge to my account and at least for the first hotel I got text messages that there was a charge. I am not sure if I would have gotten a text for a pending charge or not.

The other costs for that hotel stay were prepaid so the amount was just for their incidental precharge.

For the second stay the charge that I signed at check in was 15% higher to cover potential incidental charges.
I get notifications from each of my cards (Capital One, Citi, and Chase) as soon as they are swiped (meaning when authorization is requested and the charge is still pending). Also, the apps all segregate Pending and Posted charges, and one can see the lag time between authorization and posting.

Good example is when I buy gas: there’s an immediate authorization for $1 when I start (the gas pump making sure my card is valid but not knowing how much I’m going to spend) then the actual final charge once I’m done. But the $1 test hold never posts.

I’m not sure if all card issuers do it that way.

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goingup
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Re: Hotel "incidentals" credit card precharge?

Post by goingup » Mon Oct 28, 2019 12:36 pm

sfnerd wrote:
Mon Oct 28, 2019 12:03 pm
goingup wrote:
Mon Oct 28, 2019 11:43 am
Yes, I got a $100 charge for incidentals when checking into a Hampton Inn a couple months ago. It was an actual charge that appeared as "pending" on my account for several days until it disappeared. I figured it's a way for Hilton to float some money at my expense. Pretty annoying.
They don't actually receive any money until the charge is finalized. Even after the charge is settled, it still takes them a day or two to get the money, at best. So really they don't get any float.

These charges are purely to ensure you can pay if you leave without paying / checking out.

If the charge appears to be settled (charged) and not just authorized (pending) it is likely that the merchant just has a system that authorizes and settles at the same time. They can refund the charge later.

Most companies just authorize, then they settle after, because this may save them money on CC fees if the customer doesn't end up spending money in the hotel. However, in your case the hotel chain probably negotiated so that they don't pay fees for refunded transactions.
I do think it's float because I suspect they count that as a "receivable" in their books. It's wiped out several days later, but in the meantime it buoyed their financials. I'm not a corporate accountant but I am cynical!

We travel a fair amount and I can't remember ever having a real CC charge appear for incidentals before. The room was prepaid. It wasn't just a "we're going to swipe your card in case of incidentals" it was a "we're going to bill your card $100 and it will be taken off in a few days if not needed."

I might be mistaken, but like Watty noted, this seems new.

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Re: Hotel "incidentals" credit card precharge?

Post by othermike27 » Mon Oct 28, 2019 2:09 pm

Watty wrote:
Mon Oct 28, 2019 12:19 pm
TropikThunder wrote:
Mon Oct 28, 2019 12:07 pm
Watty wrote:
Mon Oct 28, 2019 11:35 am
This was an actual charge and not just a credit hold.
More likely it’s just a pending charge, which is exactly how a hold works. That’s pretty much how it’s always worked in my experience, for rental cars as well, as a way for the business to know the card is good and will potentially accept an estimated incidental fee. They usually say in the fine print that they’ll apply a hold, and the hold will reduce your available credit on that card. It takes a couple days for a valid charge to go from Pending to Posted, but for holds they just don’t complete (don’t post) and fall off when they expire since the business doesn’t complete them. I’m curious to know how you can tell it’s an actual charge unless you’re staying at the hotel long enough for it to actually post.
I get text messages whenever there is a charge to my account and at least for the first hotel I got text messages that there was a charge. I am not sure if I would have gotten a text for a pending charge or not.

The other costs for that hotel stay were prepaid so the amount was just for their incidental precharge.

For the second stay the charge that I signed at check in was 15% higher to cover potential incidental charges.
Login to your credit card account to see the status of any charge for which you get a text msg. In my experience, most CC's notify as soon as a charge is made but it shows as "pending" for 2-3 days before posting. A pending charge reduces your credit limit temporarily, but has no other effect and costs you nothing to require a refund. Credit holds are routine for hotels and some other travel related charges. A charge is applied to your account only when it posts.

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Re: Hotel "incidentals" credit card precharge?

Post by Texanbybirth » Mon Oct 28, 2019 2:20 pm

stan1 wrote:
Mon Oct 28, 2019 12:12 pm
AerialP wrote:
Mon Oct 28, 2019 11:51 am
I am a "roadwarrior" across North America and spread my stays almost exclusively among three major hotel families/programs: Hilton Honors, IHG (Holiday Inns, etc), and Bonvoy (Marriott/SPG).
This incidentals pre-charge, which floats on my credit card as "pending" until check-out, is very standard practice and has been for over 5 years that I can recall.
My experience as well. Never had a problem with this pending charge being turned into an actual charge.
+1, happened over a dozen times in the last 3-4 years. Never been an issue, and even once had them charge me for stuff I didn't use. Called to point it out and it was refunded the very same day on the credit card.
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Re: Hotel "incidentals" credit card precharge?

Post by Hockey10 » Mon Oct 28, 2019 2:49 pm

Texanbybirth wrote:
Mon Oct 28, 2019 2:20 pm
stan1 wrote:
Mon Oct 28, 2019 12:12 pm
AerialP wrote:
Mon Oct 28, 2019 11:51 am
I am a "roadwarrior" across North America and spread my stays almost exclusively among three major hotel families/programs: Hilton Honors, IHG (Holiday Inns, etc), and Bonvoy (Marriott/SPG).
This incidentals pre-charge, which floats on my credit card as "pending" until check-out, is very standard practice and has been for over 5 years that I can recall.
My experience as well. Never had a problem with this pending charge being turned into an actual charge.
+1, happened over a dozen times in the last 3-4 years. Never been an issue, and even once had them charge me for stuff I didn't use. Called to point it out and it was refunded the very same day on the credit card.
I have had the same experience at multiple Hampton Inns. The first time it happened, I was checking in at the front desk and got a text from Chase noting that a charge of $X was just made on my account. I was expecting only to be charged $Y so I asked about the discrepancy on the spot. The extra pending $ amount drops off your account eventually.

patrocity
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Re: Hotel "incidentals" credit card precharge?

Post by patrocity » Mon Oct 28, 2019 3:31 pm

Hilton downtown Chicago was $100/night for the incidentals. It got refunded back, but it did make me take a double take initially.

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Re: Hotel "incidentals" credit card precharge?

Post by lstone19 » Mon Oct 28, 2019 4:36 pm

goingup wrote:
Mon Oct 28, 2019 11:43 am
It was an actual charge that appeared as "pending" on my account for several days until it disappeared.
Just because it says "pending" does not make it an "actual charge". Holds show up on-line as Pending. That so many people are getting upset about holds showing up as pending charges just shows that as the saying goes, a little knowledge is a dangerous thing.

I was recently on a cruise. Each night, I'd get an alert from Chase:
As you requested, we are notifying you of an online, phone or mail order charge.
This incremental charge of ($USD) 7.97 at NAME OF SHIP has been authorized on 10/18/2019 4:52:45 AM EDT.
A merchant may apply an incremental amount if the initial estimate wasn’t enough to cover the charge.

Note in particular that it says "incremental charge". Reading between the lines, this means they increased the amount of the hold. None of these individual amounts ever appeared as finalized charges - only the total and only when the cruise was over (the cruise was 19 days - I expect one advantage of doing the nightly update with an incremental amount was to keep the hold alive so it wouldn't age off.

My general rule is for anything in the travel industry, I don't worry about amounts until I see a finalized amount.

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Re: Hotel "incidentals" credit card precharge?

Post by atlgenxennial » Mon Oct 28, 2019 4:41 pm

goingup wrote:
Mon Oct 28, 2019 11:43 am
Yes, I got a $100 charge for incidentals when checking into a Hampton Inn a couple months ago. It was an actual charge that appeared as "pending" on my account for several days until it disappeared. I figured it's a way for Hilton to float some money at my expense. Pretty annoying.
I get the "pending" all the time. OP indicated that it was an actual charge that required a credit to offset.

I always get pending and then after 3-4 days it goes away; never on statement; never accruing any interest.

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Re: Hotel "incidentals" credit card precharge?

Post by HawkeyePierce » Mon Oct 28, 2019 4:43 pm

goingup wrote:
Mon Oct 28, 2019 11:43 am
Yes, I got a $100 charge for incidentals when checking into a Hampton Inn a couple months ago. It was an actual charge that appeared as "pending" on my account for several days until it disappeared. I figured it's a way for Hilton to float some money at my expense. Pretty annoying.
If it was pending the entire time, it was only an authorization and the hotel never received the money as the transaction never settled.

(I build credit card billing systems for a living)
goingup wrote:
Mon Oct 28, 2019 12:36 pm
I do think it's float because I suspect they count that as a "receivable" in their books. It's wiped out several days later, but in the meantime it buoyed their financials. I'm not a corporate accountant but I am cynical!

We travel a fair amount and I can't remember ever having a real CC charge appear for incidentals before. The room was prepaid. It wasn't just a "we're going to swipe your card in case of incidentals" it was a "we're going to bill your card $100 and it will be taken off in a few days if not needed."

I might be mistaken, but like Watty noted, this seems new.
I would be extremely surprised if Hilton is booking revenue on pending charges. Most likely they recognize revenue from a stay on multiple days. That is, after the invoice is finalized, some amount is recognized for the first day of your stay, some for the second, etc. depending on what's on the invoice (nightly room charges, room service, incidentals, etc). The credit card charge is orthogonal to all of this as they won't actually receive the cash in their bank account for some days after the charge is settled anyways.

Again, I do this for a living. This is not a nefarious ploy to boost their revenue, it just wouldn't work.

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goingup
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Re: Hotel "incidentals" credit card precharge?

Post by goingup » Mon Oct 28, 2019 6:12 pm

lstone19 wrote:
Mon Oct 28, 2019 4:36 pm
goingup wrote:
Mon Oct 28, 2019 11:43 am
It was an actual charge that appeared as "pending" on my account for several days until it disappeared.
Just because it says "pending" does not make it an "actual charge". Holds show up on-line as Pending. That so many people are getting upset about holds showing up as pending charges just shows that as the saying goes, a little knowledge is a dangerous thing.
I'm just saying that I think the way the Hampton Inn/Hilton chain handled credit card pre-authorization was different. They did not just swipe a card for the possibility of additional charges; they actually charged a dollar amount which appeared as a "pending" charge.

We've stayed in 13 hotels so far this year for a total of 31 nites. To my recollection, the Hilton chain is the only one that "charged" for incidentals upon check-in. It's true that 3-4 days after checking out the pending charge disappeared, but I find the practice annoying. Most hotels just swipe your card so they can use it later if needed. The Hilton chain goes a step beyond that.

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Re: Hotel "incidentals" credit card precharge?

Post by Moneta » Mon Oct 28, 2019 6:17 pm

Yep, this is standard practice and has been for quite some time, to my knowledge! I've been encountering it at every hotel I've stayed at for at least the past 3 years, maybe more. I think it's just a way for them to be covered in case you drink the $10 bottled water they thoughtfully place in your room.

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Re: Hotel "incidentals" credit card precharge?

Post by Barsoom » Mon Oct 28, 2019 6:31 pm

It may just be that, as companies modernize their back-office systems to be more standardized across industries, these transactions are becoming more transparent to the customer. The wording ("pending" vs. "hold") may have been standardized by back-office service providers via the cloud, and so new terms are being shown for the same past practices.

-B

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Re: Hotel "incidentals" credit card precharge?

Post by Prokofiev » Mon Oct 28, 2019 6:39 pm

We stay 100+ nights a year, mostly with Marriott and this is standard procedure almost everywhere.

If we have a 3-night stay for $500 with a reservation, they will authorize (pre-authorize?) around $600 that exists as a hold against your credit limit.

It is to protect the hotel against fraud or simply not having sufficient credit to make the stay. What if your card is not valid? Or has an extremely low credit limit? Or a large credit limit that has been 99% used? You could walk and they would be left holding the bag. They could run the card weeks later or sue you for damages, but they rightly prefer to authorize an amount equal to or greater than the final bill. Upon check-out, the actual amount is charged to the card and the pending authorization disappears several days later.

Here in New Orleans I have encountered several restaurants that ask for and pre-authorize before serving you. Too many tourists will skip on the check or unknowingly(?) have insufficient credit and they cannot handle the losses. You might think this would only happen 1 in 100 or even 500, but apparently it is much higher here.
Last edited by Prokofiev on Mon Oct 28, 2019 6:45 pm, edited 1 time in total.
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Re: Hotel "incidentals" credit card precharge?

Post by Seasonal » Mon Oct 28, 2019 6:41 pm

goingup wrote:
Mon Oct 28, 2019 6:12 pm
I'm just saying that I think the way the Hampton Inn/Hilton chain handled credit card pre-authorization was different. They did not just swipe a card for the possibility of additional charges; they actually charged a dollar amount which appeared as a "pending" charge.
A "pre-authorization" is done by a pending charge. This either becomes an actual charge or disappears. They are not actually charging you the pre-authorized amount until you actually incur charges. You don't have to pay pending charges unless or until they are posted.

There is pending and posted. There is no third category called pre-authorization.

What you are describing is how every hotel I've ever seen treats the matter and is totally standard. Nothing unusual or untoward is going on.

By the way, under relevant accounting rules, you can't book revenue until the earning process is complete. A pre-authorization charge therefore cannot be booked as revenue until the customer actually incurs the charge.

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Watty
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Re: Hotel "incidentals" credit card precharge?

Post by Watty » Thu Nov 07, 2019 2:43 pm

I got home and I had a chance to review my credit card account online.

The extra charges are not showing up now so I cannot see the details but they must have just been in some sort of pending status that were never finalized.

That is pretty much like it has always worked and my concerns were because of the text message and registration paperwork that had the extra amounts on them.

Thanks.

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