Pizza lovers bemoan delay in purchase charges
Published: Wednesday, September 19, 2012 at 7:39 a.m.
Last Modified: Wednesday, September 19, 2012 at 7:39 a.m.
Eat at Little Caesars Pizza in January? Better check with the bank.
Thousands of credit and debit card transactions at two Little Caesars Pizza restaurants in Sonoma County were delayed, some as long as nine months.
The glitch, apparently with the bank that processes payments, caused a temporary revenue slump for the franchise owner, an uproar from customers and also may have violated the time limit for valid transactions.
With the art of balancing a bank account having mostly gone the way of the Dodo bird, it was overdrawn accounts, delayed fees and sinking-heart moments at the bank for perhaps thousands of customers who bought pizza at the restaurants in Rohnert Park and Petaluma.
“I just don't know how a business can hold onto transactions that long,” said Scott Rostoni, 37, of Petaluma, who last week was hit with $300 in withdrawals stemming from purchases back to February.
Kiersten Percell, 24, of Petaluma was shocked to see her account was overdrawn last week when she deposited a check.
The culprit: eight transactions from Little Caesars Pizza totalling about $130. But Percell hadn't been to the N. McDowell Boulevard restaurant in weeks.
“I was furious, I thought Little Caesars stole my debit card information,” Percell said.
But the problem stems from the company that processes Little Caesars card transactions, said franchise owner Fred Berry, who owns five Little Caesars in Sonoma County.
Fifth Third Bank based in Cincinnati, processes all card transactions at all of his restaurant, he said, but the glitch effected only the Rohnert Park and Petaluma stores.
Berry said he noticed in late August that he was missing “a large, large amount of money” from a few thousand transactions. Officials with Fifth Third Bank told him that a software glitch caused the payments to hang in limbo at the two stores, he said.
Customers who paid with credit or visa cards between Jan. 3 and September never got charged.
Finally, the bank sent all the charges through during the first two weeks of September, with some customers getting billed nine months after the meal.
“This is a nightmare,” said Berry, who lives in American Canyon.
The delay was too long in some cases, according to a spokesman with Visa.
A merchant must deposit a debit or credit card transaction within three days, said Visa spokesman Ted Carr. Then, within five days of the transaction, the company that handles credit and debit charges, called an acquirer, must process the payment.
“These customers that got hit, if they're questioning this, they have some rights,” said Byron Webb, vice president of electronic banking with Exchange Bank.
Normally when a customer pays for an item with a card, the seller's computer system requests a preliminary authorization from the bank, said Webb.
The system “pings” the customer's bank and if there are enough funds the transaction is authorized. Most transactions are posted to the person's account the next business day, but the bank's preliminary authorization is good for 90 days, Webb said.
After that, there's no guarantee.
“Someone is asleep at the wheel if that happens,” Webb said.
Berry said that when he became aware of the problem he thought the money was tied up somewhere between the processor and his bank. He said he didn't know customers hadn't been charged.
Until complaints started pouring in. Outraged customers demanded an explanation from the store's managers, who initially had no answer. Some like Percell and Rostoni commented on Little Caesars' corporate site, the company's Facebook page and other sites such as Yelp.
Rostoni said he was alerted to the issue through friends who posted on Facebook. “I checked our account and sure enough,” said Rostoni, the operations director of a high-tech medical equipment company and father of two.
Some banks flagged the late transactions as fraud. About $340 in charges to Exchange Bank customers from Little Caesars failed to go through because the bank accounts had since been closed, said Webb. Most of those transactions averaged about $7.
The amounts, although sometimes small, tapped already taxed bank accounts.
Scott Scheppelmann, 25, of Petaluma went to buy grocers but found he only had $2.52 in his account. “It is not OK to charge people's account without telling them,” Scheppelmann said.
For Rostoni, who has two children, the sudden drawdown to his account has been tough.
“I sure could use that $300 right now because we're scraping by,” Rostoni said. “Part of the reason we went to Little Caesars ... is because I could feed a family for $10.”
Berry said he's instructed his managers to hand out letters of apology to customers that outline the problem and ask for understanding.
“We're trying to deal with it as best as possible but it has just been really really frustrating, hurtful at times,” said Berry. “My employees are getting the brunt of this. The customers are being inconvenienced and I am truly sorry for that.”
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