What Happens If You Don’t Close Your Tab?

When visiting a restaurant or bar, opening a “tab” allows customers to defer payment for multiple purchases until the end of their visit. An unclosed tab occurs when a customer leaves the establishment without formally settling their bill, often due to oversight or forgetting the open account. This situation initiates a specific process for the establishment to finalize the charges.

Understanding Open Tabs

Opening a tab typically involves presenting a credit or debit card, which the establishment then uses to create a running account for purchases. A fundamental aspect of this process is the pre-authorization hold, where the establishment verifies the card’s validity and ensures sufficient funds are available. This involves placing a temporary hold on a specific amount, which can range from a nominal value like $1 to a higher estimated amount like $75 or $100, depending on the venue’s policy. This pre-authorization is not an actual charge but rather a reservation of funds, reducing the customer’s available credit or balance temporarily.

Pre-authorization holds mitigate financial risk for the business. The funds are set aside by the card issuer but are not transferred to the merchant at this stage. The pre-authorization typically lasts for a period ranging from a few hours to several days, commonly five to seven days, though some can extend up to 14 days or even 30 days for certain transaction types. This mechanism allows the establishment to securely link purchases to the customer’s card without physically retaining the card.

What Happens When a Tab Is Not Closed

When a tab is left open and the customer departs, establishments typically follow a standard procedure to finalize the outstanding charges. One common practice is the application of an automatic gratuity. Many bars and restaurants have a policy, often disclosed through signage or on menus, stating that unclosed tabs will incur a default tip. This automatic gratuity usually ranges from 18% to 20% of the total bill.

After applying any automatic gratuity, the establishment processes the final charge to the card on file. This finalization adjusts the initial pre-authorization hold to reflect the actual total amount due, including all items consumed and the added gratuity. The finalized charge usually appears on the cardholder’s bank or credit card statement within one to five business days, though this can vary by financial institution and processing times. The final charge is the only amount that actually posts to the account.

Addressing Unrecognized Charges

Discovering an unrecognized or incorrect charge on a statement originating from an unclosed tab requires a structured approach to resolve. The first step involves thoroughly reviewing the credit card or bank statement to identify the merchant’s name, the date, and the exact amount of the charge. Confirm that the charge has fully posted, as pending charges cannot be disputed.

The next action is to contact the establishment directly to discuss the discrepancy. Many issues can be resolved quickly by speaking with the bar or restaurant management, as they may be able to correct billing errors more efficiently than a third party. If direct resolution with the merchant is unsuccessful, consumers can then initiate a dispute with their credit card company or bank under the Fair Credit Billing Act (FCBA).

This federal law protects against billing errors, including unauthorized charges or incorrect amounts. To dispute a charge under the FCBA, consumers generally must notify their card issuer in writing within 60 days of the statement date on which the error first appeared. The written notification should include the consumer’s name, account number, the transaction date, the disputed amount, and a clear description of the error.

The card issuer is required to acknowledge the dispute within 30 days and to investigate and resolve it within two billing cycles, or no more than 90 days. During the investigation, the consumer can typically withhold payment on the disputed amount. Supporting documentation, such as receipts or communication records with the merchant, should be kept and provided to the card issuer to strengthen the dispute.