It has been posted before and most likely will have to be again. Apple cannot withdraw funds from your credit card account until they ship the item. A hold is just a pre-authorization. It just makes sure the funds are in the account (as stated on the front page). The pre-authorization only lasts for a limited time (as stated later in this thread) after which the process needs to be kept alive or Apple loses the sale without re-authorization.
A very general overview of what is happening, if anyone cares:
There is Apple, the vendor.
There is the merchant processing company.
There is the credit card company.*
There is the purchaser, you.
* For debit cards/bank check cards you can add that there is your bank.
The purchaser orders an item from the vendor. The vendor, who just happens to accept your credit card, takes the credit card number and submits it to the merchant processing company. The merchant processing company asks either the bank or credit account if there is $X available in the account to pay for the item (sometimes it is more, less, or exactly the amount of the item). If there is, the merchant processing company approves the transaction and puts a temporary hold on the funds assuming the vendor will want to complete the transaction within the contracted deadline. The vendor needs to act upon that pre-approval within a stated amount of time or the transaction is forfeit. If the vendor does not complete the transaction, they do not without the purchasers specific authorization, have authority to create a new ticket/transaction. The vendor would have to call everyone back and ask them to resubmit their order. If they (it could be Apple or their merchant processing company) tickle the account every so many days the ticket stays alive. That is why they so these pre-aprovals. Some banks "hold" the funds. They stay in your account but do not let you use them because they have been supposedly spoken for. Some banks do not. The money is still yours. It is in your bank. You might not have access to it for a day or two but it is there. If it is never taken by the merchant processing company you will have earned interest on it for the full period in a bank type account or not paid interest on it if a credit card.
Once the items are shipped the vendor closes what is called a "batch". That batch is all the approved transactions for that day, for orders shipped. The merchant processing company then processes the transaction and usually within three days "loans" the money to the vendor. At the same time they are requesting the funds from the purchasers bank or credit account. The vendor pays all sorts of fees to pay for the loan, processing, being able to accept card brands, transaction fees, and those fancy points, miles or money back schemes the purchaser takes advantage of. If for some reason the funds are not there the bank or credit account holder informs the merchant processing company and the merchant processing company takes back their loan and a penalty from the vendor. Similarly, if you call your credit card company and tell them you are not happy with the item, or you did not make the purchase, the credit card company tells the merchant processing service, and the merchant processing service takes the money back, plus penalties, and sends money back to the originating account. No questions asked. It becomes the vendors issue and must prove beyond a doubt that the transaction was legitimate/authorized by the purchaser. It is therefore best to keep a transaction open/alive to prevent any problems about who ordered what and when.
The re-submittal of the authorization often triggers fraud alarms with the credit card and bank companies. Think about it for a moment. All they are seeing is the request to purchase several high priced items, several times, from the same vendor (which happens to be in one of the industries where most credit card scams are used).
Common misconceptions:
Apple has taken your money. They have not. It is still in your account but you credit card company or bank may block you from access to it.
These holds mean the iPad is coming sooner than Apple has stated. It also does not imply they won't come early.
Every bank handles the process the same way. They do not.
A very general overview of what is happening, if anyone cares:
There is Apple, the vendor.
There is the merchant processing company.
There is the credit card company.*
There is the purchaser, you.
* For debit cards/bank check cards you can add that there is your bank.
The purchaser orders an item from the vendor. The vendor, who just happens to accept your credit card, takes the credit card number and submits it to the merchant processing company. The merchant processing company asks either the bank or credit account if there is $X available in the account to pay for the item (sometimes it is more, less, or exactly the amount of the item). If there is, the merchant processing company approves the transaction and puts a temporary hold on the funds assuming the vendor will want to complete the transaction within the contracted deadline. The vendor needs to act upon that pre-approval within a stated amount of time or the transaction is forfeit. If the vendor does not complete the transaction, they do not without the purchasers specific authorization, have authority to create a new ticket/transaction. The vendor would have to call everyone back and ask them to resubmit their order. If they (it could be Apple or their merchant processing company) tickle the account every so many days the ticket stays alive. That is why they so these pre-aprovals. Some banks "hold" the funds. They stay in your account but do not let you use them because they have been supposedly spoken for. Some banks do not. The money is still yours. It is in your bank. You might not have access to it for a day or two but it is there. If it is never taken by the merchant processing company you will have earned interest on it for the full period in a bank type account or not paid interest on it if a credit card.
Once the items are shipped the vendor closes what is called a "batch". That batch is all the approved transactions for that day, for orders shipped. The merchant processing company then processes the transaction and usually within three days "loans" the money to the vendor. At the same time they are requesting the funds from the purchasers bank or credit account. The vendor pays all sorts of fees to pay for the loan, processing, being able to accept card brands, transaction fees, and those fancy points, miles or money back schemes the purchaser takes advantage of. If for some reason the funds are not there the bank or credit account holder informs the merchant processing company and the merchant processing company takes back their loan and a penalty from the vendor. Similarly, if you call your credit card company and tell them you are not happy with the item, or you did not make the purchase, the credit card company tells the merchant processing service, and the merchant processing service takes the money back, plus penalties, and sends money back to the originating account. No questions asked. It becomes the vendors issue and must prove beyond a doubt that the transaction was legitimate/authorized by the purchaser. It is therefore best to keep a transaction open/alive to prevent any problems about who ordered what and when.
The re-submittal of the authorization often triggers fraud alarms with the credit card and bank companies. Think about it for a moment. All they are seeing is the request to purchase several high priced items, several times, from the same vendor (which happens to be in one of the industries where most credit card scams are used).
Common misconceptions:
Apple has taken your money. They have not. It is still in your account but you credit card company or bank may block you from access to it.
These holds mean the iPad is coming sooner than Apple has stated. It also does not imply they won't come early.
Every bank handles the process the same way. They do not.
