That is standard practice in the industry - it's securing a deposit in case they don't receive your device back in the condition described. Apple does the same thing, as described here:
https://support.apple.com/iphone/repair/service/express-replacement
What are the charges on my credit card?
When you request Express Replacement Service, we put a temporary authorization on your credit card to cover the full replacement value of your product. This authorization will expire if:
Your repair is covered under warranty, an AppleCare plan, or consumer law
We receive your original product on time. In that case, you won’t pay late fees or replacement value.
Late fees and replacement value
When we send you a replacement iPhone through Express Replacement Service, you need to return your originally purchased iPhone to us within 10 business days. After 10 days, we'll charge you the full replacement value.
If your original iPhone arrives late, we’ll remove the charge for the replacement value. You’ll pay only a late fee. A late return is between 10 and 20 business days after we ship the replacement to you.
If your iPhone was severely damaged in an accident or it's inoperable after unauthorized modifications, or if we never receive it, we’ll charge you the replacement value.
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