When grad and undergrad grading scales are different, what policy applies to undergrads taking grad courses?

I heard range of grade in graduate school shrinks and grade mostly ranges from A to B-. However question is what if an undergraduate students takes a graduate course, how should be grading for him/her? The reason why I am asking is because he/she is in a graduate course so his/her grading can't be different from others but getting B- for an undergraduate student does not mean he/she is failing so his/her situation is different from graduate students.