I was wondering how many banks were paying a debit card transaction into the overdraft and charging an NSF fee. The merchant puts a 3 day hold on the account which takes the amount out of the available balance and then the debit should come through and clear it, however, sometimes the debit comes through after the hold has fallen off and creates an overdraft. Are most banks charging an overdraft fee?

Our system charges the fee and generates a notice, but still pays the item.

We OD and charge. If the customer continues to abuse the debit card, we will cancel the card to reduce the risk of losing money

We pay the debit and charge the $25.00 OD fee.

It is my understanding that we are required to pay the point of sale since the customer had already received the goods at the point that we approved the debit. This is part of the merchant/bank agreement regarding debits. We overdraft the account and charge the fee but if it continues, the debit card is turned off. Unfortunately the bank can take losses with debits but that's the risk of doing business. We report the customer to NCPS and attempt collection.