Expedia charged my card even though the "Reserve Now, Pay At Property" option was selected

Question

I booked a hotel in Paris for three nights on Expedia using the "Reserve Now, Pay at Property" option for 616 euros. I was asked to guarantee the booking with a credit card, and within two minutes I was charged 213 euros by a merchant with the same name as the hotel I booked. However, the booking confirmation from Expedia still says I owe the full 616 euros at the property upon arrival. Is this a scam? Why was I charged an arbitrary amount, and are my credit card details secure on Expedia?

Answer 1

When you make a card payment, there are two different operations which take place: authorisation and actual charge.

In most circumstances, there’s an authorisation at the time of purchase (that’s when the card issuer checks whether the card is valid, there are funds available, etc, and they return a status and an authorisation number at that time), and then later (usually overnight), the actual charge is made.

Until the charge is made, no funds have been taken from your account. Depending on the type of card, the funds may be “taken aside” until the charge, but if the authorisation is cancelled or the charge never happens (after a few days, usually about a week), any funds “taken aside” are put back.

The authorisation will affect the available funds (for instance, if you have a 10K limit and there is an authorisation for 1K, you can only spend 9K until that authorisation is cancelled or runs out), but the funds will not be actually taken out from your account. They will not show up on your statement.

Most likely this is what happened here: they made an authorisation request, to verify that the card is valid, and that there are enough funds on it to guarantee the payment. In some cases the authorisation is held until the actual charge (which will use that authorisation number), but in most cases that authorisation will either be cancelled right away or will run out in a few days (as you may end up paying with a completely different card, or the stay may be long after the authorisation runs out).

Most card transaction alerts are actually for the authorisation rather than the actual charge, and it’s frequent that there are no further alerts for the authorisation being cancelled or running out. If you check your transactions the authorisation may not show at all, or it may show up as “pending”. Follow up on that, but it’s most likely the authorisation will just disappear within a few days.

Answer 2

It is likely a reservation and not a payment and they will likely not make it into a payment. This is a way to make sure that your credit card works.

I often have a reservation against my credit card which is never turned into a payment. (On my credit card online statement they even show it in a different colour.)