Debit Cards - Industry Information from Credit Card Advisory Services

Debit Cards are issued by banks offering cardmembers the ability to access their bank account funds to pay for items. The cards look exactly like "Credit Cards" which is where all the trouble starts. Guests use debit cards to guarantee reservations and hotel stays not realizing the cash balances in the checking accounts will be frozen to pay for the stay. As a result, guests can experience overdrafts to their checking accounts if checks are clearing while the balances are frozen.

To minimize the impact of authorization holds on debit cards, hotels should review the authorization calculation performed by the property management system or front office staff to determine if the calculation is too liberal. Also, check the High Balance Report generated by the property management system.

For your information, Visa has requested that issuing banks release authorization hold within three days of receiving the settled transaction.