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In what's being described as a 'hidden' fee for unsuspecting motorists, drivers are being hit with huge deposits when filling up with fuel.
A special Watchdog report broadcast on BBC’s The One Show highlighted just how much money motorists are being charged without them realising. The changes affect pay-at-pump services only, so payment at the kiosk remains unaffected.
Some supermarket petrol forecourts have faced criticism and backlash from customers for being charged a temporary £120 holding fee when using the pay-at-pump service. So why has this change by the credit card companies been implemented?
In this article dedicated to the topic of petrol forecourt fees and changes to how drivers are charged for pay-at-pump fuel, we explain why customers are charged prepayment fees, what supermarkets have this policy in place, and exactly how much you will be charged. Read on to find out more…
Yes. If you didn’t already know, every time you fill up with fuel from a self-service pump, your bank will take a temporary amount from your account as a ‘reserve’ fee.
So why do supermarket petrol stations apply additional fees when you fill your car with fuel using pay-at-pump? Well, the straightforward answer is so that customers can better manage their finances. However, the reality isn’t all that simple.
With fees of up to £120 being taken out of bank accounts in a single transaction, this news has left many customers concerned - and rightly so.
Any fuel station that charges temporary prepayment fees of up to £120 is required to make customers aware of the changes. Forecourt signage must make it clear that by using the pay-at-pump service with a debit or credit card, that a charge of up to £120 will automatically be taken.
Depending on how much fuel you fill your tank with, the difference will be refunded back to your bank account. For example, if you fill your car with petrol which costs £60, a £120 charge will be taken and then £60 refunded back to you - supposedly instantaneously.
Although it’s easy to blame the supermarket petrol stations for the pre-authorised £120 fee, it is in fact the credit card companies that are behind the change. They want to ensure that customers have the necessary funds in their account to go ahead with the transaction.
So far, credit and debit card companies including American Express (AMEX), Mastercard and Visa have made the changes. Ultimately, the new policy is designed to protect both the petrol retailers and its customers.
According to the credit card companies, customers should be refunded and the balance rectified straightaway. But, it seems that this isn’t always the case. Many angry motorists have taken to social media to vent their frustrations at the controversial decision.
Some drivers have reported that despite only filling their car with £20 worth of fuel, a £120 fee was immediately taken and the difference not refunded for up to two weeks.
Twitter user Maxine Bell tweeted Tesco with this comment: “You know it’s tough - took my payment for petrol then kept the £120 holding fee for over 24 hours before it dropped back into my account. Never again will I pay at the pump!”
Another Twitter user, Victoria Plumb, tweeted: “Have you heard about Tesco’s £120 ‘security holding fee’ at pay at pump? I’m currently £120 less in my account for £25 worth of petrol. This could literally put people in serious problems. Told it could take 5 days to be returned?!”
Although customers are only charged for the amount they’ve spent when refunded, the temporary inconvenience could mean that some people are unable to pay for essential items in the interim.
Our advice is that if you want to only pay for the fuel you use in the first instance, then take the time to pop in to see the cashier to make payment instead. We’d recommend contacting your bank if you have any issues or concerns with pay-at-pump prepayment fees.
The £120 deposit charge replaced the previous £1 temporary fee that used to be charged when using pay-at-pump fuel services.
These changes came into effect in September 2022, but many motorists are only just noticing the changes, as it all depends on when your credit or debit card provider implemented the change.
So that you can have complete clarity on how the pay-at-pump fuel charges work, we’ve put together a step-by-step guide:
Step 1: When using pay-at-pump services at a fuel station, you’ll start by inserting a credit or debit card in order to begin filling with fuel.
Step 2: The pay-at-pump machine will automatically communicate with your bank to check the available funds and confirm a reserve amount (this could be up to £120).
Step 3: Before you can begin refilling your vehicle, your bank will confirm the funds are available and either approve the holding fee or suggest a lower amount in order for the transaction to proceed.
Step 4: Once you’ve filled your fuel tank with the desired amount, your bank will be immediately notified of the actual value of the fuel purchased.
Step 5: Your bank will rectify and update the balance, so the accurate amount charged should be visible as of immediate effect.
As we’ve explained, the new policy is designed to ‘block out’ a pre-authorisation fee of up to £120 from your bank account, so that the desired funds are readily available.
Some of the UK’s leading supermarkets have come under fire for the changes which have left drivers re-thinking their fuel choices, and instead opting to pay at the kiosk rather than the more convenient pay-at-pump services on offer at forecourts.
Tesco, which partners with Esso to provide its customers with fuel, has defended the decision of debit and credit card companies. Bringing changes to the attention of consumers, notices displayed at their petrol stations around the country state:
“Please note, paying at pump with your card will automatically charge £120, then refund the difference back to your account from your fuel total. E.g. £10 fuel dispensed results in £120 charge with £110 back into your account within 2-48 hours (depending on your bank).”
The supermarket petrol stations that charge up to £120 when refuelling using pay-at-pump services are:
At present, it is only pay-at-pump services found at supermarket petrol stations that charge temporary holding fees - so now you know where to avoid!
If ever-increasing fuel prices and pay-at-pump holding fees are getting you down, then now might be the time to switch to a greener mode of transport. Investing in an electric vehicle (EV) will not only save on petrol and diesel costs, but there are tax benefits to consider too.
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