Ordered iPhone payment taken but order cancelled

Chris___ wrote: »

It's not on any type of hold according to BOI. It was the first transaction (the one that timed out for some reason) that the money was taken from. Apple live chat advised me to reorder it again and assured me my card wouldn't be charged for the first transaction.

I work for BOI, that image that you've put up of the mini statement shows what's referred to as a 'shadow' transaction and it can still disappear from the system, although it can take up to 10 working days. The reason I know this is because it says "18SEP DEBIT CARD" if it was a 'completed' transaction it would say "POS18SEP APPLE" (or whatever apple's online store name is).

What the branch are saying is correct in that it's not an error on the BOI end, nor is it something that they're able to rectify. However, they will not be able to do a chargeback until the transaction shows up as 'posted' ie the actual store name is visible. This type of thing only started to become an issue when the point of sale transactions went 'live' in the last few years, and Visa Debit cards were introduced.

Back in the days of Laser, what would happen is you'd go in to the shop (or online) and you'd make your purchase, put your card in the little machine dealie and off you'd go. At the end of the day when they're shutting up the shop, they have to 'batch' the card and pin machine. Basically what this would do was tell the bank who spent what and their accounts would be debited accordingly.

A rough description of what would happen would be you go in to the shop, and you want to buy goods for €20. You go up to the till and put in your card and pin, the machine then does it's thing and all going well, it would be approved and you get your receipt.

Now what happened back with Laser was that the machine would basically ask the bank did the person have €20 in their account, and if the bank said they did, then the transaction would be approved, but it would be several days before the information made it's way through to the bank that the transaction had been completed. Once that info was received by the bank, then your account was debited, however this would usually be about a week later (more if the shop was a bit inconsistent with 'batching' their card and pin machine).

If a situation arose like in your case, where the machine timed out or froze mid transaction, it wouldn't matter, because by the time the transaction hit your account, the failed transaction would have already fallen off the system, so you'd be none the wiser. This system was problematic because it took so long for customers' accounts to be debited, it was often difficult to keep track of what transactions were outstanding and they could overspend without realising it, and incur overlimit fees.

So now that the system is 'live' what happens is when you've put your pin in the machine/put your card details on a website and hit confirm, is that instead of the retailer 'asking' the bank if you've got the money, they're 'telling' them "Joe Bloggs is buying something for €20". If it's a case that you don't have the money then it's a case of computer-says-no and the transaction is declined. Otherwise, it's assumed that the purchase has been completed so your balance is reduced by that amount and you'll see "18SEP DEBIT CARD" on your mini statement, or online banking. This is referred to as a shadow transaction - it's not an actual transaction, more like a post-it note saying that there's an outstanding transaction for this amount.

Basically as far as the bank know, you've spent the €20 on something, but they're still waiting to find out where and how before the money goes away forever. Then in a day or two's time they're told it was spent in the local shop so the transaction narrative changes to "POS18SEP CENTRA" so you know where that particular sum of money was spent. This is referred to as a posted transaction.

In this case, what's happened in your situation is that the transaction obviously got as far as the point where Apple 'told' the bank "Chris is buying something for €599" but then the connection died. So as far as the bank are aware €599 was spent somewhere, but it hasn't been 'claimed' yet. When this happens, usually data comes from the retailer a few days later basically saying 'my bad, we made a booboo' and the bank knows that the money no longer has to be set aside, so the shadow transaction disappears and your balance increases by €599.

What you're seeing on that statement is the shadow transaction. The retailer doesn't get the money until the transaction is posted, so that's why Apple won't give you a refund, because technically there's no refund to give. They haven't got your money. The problem is their systems haven't told the bank that you haven't got your iphone. My advice is to sit tight for few days, this will probably fall off the systems before Friday. If at any stage before then it shows up as posted (POS18SEP APPLE) that's when you need to get the ball rolling with a chargeback.