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How a $26 Meal Turned Into a $5,475 Credit Card Bill

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In no universe does a meal costing less than $30 warrant a $5,448 tip. Such a transaction is almost certainly a mistake, and that’s the argument of a family that was charged $5,475 for two burgers and a wrap, plus tip. Still, months after the transaction went through, the family is still trying to get a refund, ABC7 in Washington, D.C., reports.

Pallavi Srivastava, her husband and her son ate at a gym cafe after touring the facility in Reston, Va., for which the total was $26.47. The employee apparently entered his ID number instead of the tip amount when completing the transaction at the register, resulting in the $5,448.69 tip.

This happened in April, and the refund process has been messy, according to the ABC report. By the time the family tried to dispute the charge, the deadline for doing so had apparently already passed, and the gym said it couldn’t issue a refund. The Srivastavas contacted ABC7 after getting nowhere with their credit card company or the gym, and the family will now reportedly receive a refund.

In the meantime, the cardholders have been dealing with late fees and interest charges over the $5,500 meal. In the months since the transaction appeared on the credit card statement, the cardholders may have suffered credit damage. The charge likely increased the credit utilization ratio (credit card balances relative to credit card limits), and if the bill went unpaid, that would hurt credit scores, as well. You can see how your credit card use affects your credit standing in many ways, one of which is to get a free credit report summary every 30 days on Credit.com.

This sort of thing isn’t unheard of — we once wrote about a pizza bill that hit $300,000 because the cashier accidentally entered the debit card authorization code to the end of the bill total — so this story is a good reminder to frequently review your card activity for errors or signs of fraud. The sooner you see something wrong, the less likely it is to damage your finances. At least, it should be easier to fix if you catch it quickly.

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  • heavyw8t

    In most cases, this is human error. How about coming up with software that eliminated human interaction completely? The automatic gas pump doesn’t make mistakes. Neither does the automatic checkout at the grocery store or home improvement store. Liberal minds want to leap to the argument that automated registers eliminate jobs. They do. They also eliminate errors. Being a conservative, selfish, warmongering hawk of a republican, I really don’t care about jobs being eliminated. (It isn’t MY job. I don’t have a job anymore.) I care about accurate, fast transactions. People who are so against automation and progress offered by technology speak out against such things often. Yet I don’t see their horse and buggy tied up outside the grocery store, and they read their shopping list from a smart phone…. you can’t pick and choose which parts of technological advancement you like. These are the same people who don’t understand economics enough to grasp that of burger flippers make $15 an hour, the burgers they flip will sell for $7. The corporations are not going to absorb those wage increases. They will be passed along to customers. That will result in less traffic coming through the door, and employees will end up being laid off. You win!!!

    • George

      Only if the burger flippers flip 2 burgers per hour the burger should cost 7 dollars.
      other than that the cost is not the burger flipper!!!

      • heavyw8t

        If the burger flipper is making $15 an hour, he makes that $15 an hour whether he flips 2 burgers per hour or 100. They don’t get paid piece work. They make an hourly wage. That payroll increase will be passed along to the customer, unless you are naive enough to think it will be absorbed by the company. That affects their bottom line by 47%, FAR too much to absorb. They may not pass the whole 47% increase to the customer, but it will likely be no less than 46%!

  • Stephen Troup

    There are 2 things woefully lacking in this article. Where is the WAITER & CAFE OWNER in all this mess. The tip was paid by the credit card company, therefore the WAITER received it (or at least the Cafe Owner as the fiduciary). The problem, for the most part, could have been almost completely avoided by a Cafe Owner or waiter who immediately had the HONESTY & INTEGRITY to return the tip to the customer as soon as they received it. The fact that obviously did not happen is a sad reflection on the integrity of both the cafe owner & waiter involved.
    This story does a bit of a disservice by pitting it as Consumer vs the Big Bad Credit Card companies. The Credit Card company did exactly what it was suppose to do, the Waiter was directly at fault & the Cafe Owner at fault indirectly.

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