From: Black Unicorn <unicorn@schloss.li>
Date: Sat, 19 Oct 1996 10:46:13 -0700 (PDT)
To: cypherpunks <cypherpunks@toad.com>
Subject: Car Rental: Refusal to take Check Cards
Message-ID: <Pine.SUN.3.94.961019134233.19884H-100000@polaris>
MIME-Version: 1.0
Content-Type: text/plain



Curious about this policy I went out to rent a few cars this week with a
new check card from a local D.C. bank.

Here were my results:

Avis: Refused
Hertz: Refused initally, but accepted after coaxing
Thrifty: Refused
National: Refused
Alamo: Refused, got quite impolite after coaxing
Enterprise: Accepted, but only because the teller barely spoke english
Dollar: Closed

The policy seems to be well entrenched.  A few calls and some phone
jockying finally produced an explanation from Richard Vine, Assistant to
Edward L. McCarty the President and General Manager of Enterprise
Rent-A-Car.

According to him:

When the customer rents a car and uses a normal credit card, the
Rent-a-Car company "reserves" the funds which are essentially "In limbo."
By requesting an authorization from e.g., Visa for a certain amount, that
amount is deducted from the credit line of the customer.  The customer
cannot spend it away and it is essentially "reserved" for the rental car
company.  The rental car company, should they be forced to try and collect
funds, essentially has an option on the funds (a security interest in the
credit of the consumer?)

Check cards suffer from a few defects from the view of car rental
companies.

1.  The customer can stop payment on a charge.
Although I pointed out that a customer can likewise stop payment on a
credit charge, it appears that while the credit card issuers must adhere
to a standard requirement for dispute resolution (between merchant and
issuing bank) check cards often have no standard dispute resolution system
or no system at all.  This leaves the recourse to negotiations between
rental car company and consumer.  This often results in collection
procedures.  (Read, expensive)

2.  The customer can spend down the account entirely before the payment is
posted.
This cannot be done with credit cards as a portion of the credit line is
"authorized but not processed."

Essentially the rental car companies are concerned that they may never be
paid.  It seems check cards have been the subject of much abuse in this
field.  Check cards do not provide for instant clearing as far as I can
tell.  I think check cards simply give the account number to the
merchant's machine and then a "check" is printed out on the spot and
signed by the customer.  As far as I can tell, the transaction still
requires processing, even if it is a bit more automated.

One would assume that on the spot clearing methods (digital cash) would
solve this problem.  Just TRY, however, to rent a car with real cash.

I pointed out "Many check cards don't necessarily look like check cards,
how are you dealing with that?"

Answer: "We're working on it."

Cash is dead.

(The good news is that I had 2 rental cars to play with for the day.
Haven't yet decided if I should take the $200 out of my checking card
account before the transactions post).

--
I hate lightning - finger for public key - Vote Monarchist
unicorn@schloss.li