[macintologist]

I recently went to a small business (a pet food store) to buy some dog biscuits for the in-laws's puppy for Xmas. I got a pound of biscuits and it came to about 8 bucks. I pulled out my credit card and the cashier said "We have a 10 dollar minimum on a card"

Whatever, I just got more biscuits and put it above 10 bucks, but after I left the store I was pretty sure that guy was breaking the rules. Doesn't the credit card merchant contract state that you can't treat card-using customers any different from cash customers?

Should I contact VISA and report this asshole or just let it be?

[Andrew Stephens]

In the UK, many many small businesses have a card minimum. This normally applies to credit card transactions rather than debit cards, but some do both.

I guess it's to cover off the card transaction costs they get hit with by the CC companies.

[TETENAL]

Just let it be. If credit card fees eat up all their revenue for small purchases, then what would be the point of doing business? It's a pet food store, so most of their sales are small ones I would assume.

[macintologist]

Originally Posted by TETENAL 

Just let it be. If credit card fees eat up all their revenue for small purchases, then what would be the point of doing business? It's a pet food store, so most of their sales are small ones I would assume.

If he can't handle the CC fees then why even be a CC merchant?? I know plenty of businesses that do not accept CC's, period.

[macintologist]

http://www.creditcards.com/credit-ca...terms-1275.php

No minimums, no maximums
One of the more common violations, Visa customer service says, is when merchants try to impose minimum or maximum charge requirements on transactions paid with a Visa card. Some rules are not as straightforward. For instance, although asking for supplemental identification is a very common and perfectly legal merchant practice -- vendors are within their rights to ask for identification and proof of a name and signature -- the customer is under no obligation to honor this request, and the vendor cannot make this request a condition of the sale.

As for tacking on fees to credit card purchases, according to a Visa spokeswoman, "To clarify Visa's rules, merchants are not permitted to charge cardholders an additional fee for using a Visa card. However, service stations and other merchants are welcome to offer discounts to consumers who pay with cash or use their debit card with a personal identification number (PIN)."

[thechidz]

there are very many stores that enforce minimum purchases, I would complain if you were 30 cents under but for a couple bucks just get an extra couple of biscuits

[Chuckit]

Would you really rather not have the option of using a card at all? I hate when places don't take credit cards.

[lexapro]

Absolutely not allowed to charge a minimum. Call 800-VISA-911 and report him. I've seen times where they take away the machine.

[MacMan4000]

...........

[ort888]

Credit card companies have these small businesses by the balls. The fees they charge are outrageous and in todays world they have no choice but to accept credit cards. Large companies can negotiate better rates, but small mom n pop stores end up paying a pretty sizable chunk of change to the credit card companies for every sale.

When your overall profit margin is low, giving up 3%, 4% or 5% of every sale in credit card fees can kill you.

It's kind of scary to think about, but the average fee for credit card usage is something like 2%. I'm willing to bet that 75% or more of all transactions these days are handled by credit card. That means that the credit card companies are basically skimming a percent and a half off the top on sales of... just about everything. Not to mention the interest they charge.

[Cold Warrior]

Yeah, it's scary sometimes because 2-5% of the Western world's business transactions is like a sovereign nation's tax base and tax authority. I bet they are making some serious coin.

[turtle777]

No CC, no business with me.

I hate cash, because it's so much harder to keep track where you're spending your money.

-t

[macintologist]

Originally Posted by turtle777 

No CC, no business with me.

I hate cash, because it's so much harder to keep track where you're spending your money.

-t

That's exactly why I don't use cash, not to mention my bank's ATM is a 20 minute walk away. Why use cash when I can use a credit card and track exactly where I'm spending all my money?

[RobOnTheCape]

I think I read somewhere awhile ago that if you use debit cards over CCs that the vendor is charged a lower flat rate, thus I use debit over credit whenever possible. All the same to me, but why give the big banks the coin when the mom and pops need it much more.

[CharlesS]

Originally Posted by MacMan4000 

For example, the local donut shop (Great American Donut Shop. best donuts ever.). I've never ordered more than $5 worth of donuts, so if the CC company wants to charge them $2 that basically ruins the sale for them if they dont ask for an extra fee.

Originally Posted by ort888 

It's kind of scary to think about, but the average fee for credit card usage is something like 2%.

There seems to be a discrepancy here - 2% of a $5 purchase would only be 10 cents, not $2. Or do the CC companies have some sort of minimum charge that only becomes 2% once the purchase exceeds a certain amount or something?

[brassplayersrock²]

There's a greek mini mart around the corner and they have a $5 minimum on CC. I usually don't care, and besides, the girl that works behind the counter sometimes, is very cute.

[EndlessMac]

Originally Posted by macintologist 

That's exactly why I don't use cash, not to mention my bank's ATM is a 20 minute walk away. Why use cash when I can use a credit card and track exactly where I'm spending all my money?

Originally Posted by Chuckit 

Would you really rather not have the option of using a card at all?

So if you prefer to use credit cards then you have to look at it from the merchant's point of view because as Chuckit said would you rather they not accept credit cards at all? That's the choice small businesses will have to make if everyone complained about credit card minimum purchases. You can't have it both ways on smaller priced items.

Also I think some of you are forgetting that the profit margins on some products aren't very high and then they get even less with credit card fees. It's easier to eat the cost on higher priced items but on lower priced items it's just not worth it to even accept credit cards but the problem is that unless a store sells only cheap products then a minimum credit charge makes sense. If you have ever sold anything on eBay you will understand because after eBay charges their fee and more so if you accept Paypal you really don't keep that much of the profit on low priced items. Most of the time it's not even worth it.

Credit card companies know we like the convenience so they screw both the consumer and businesses with high interest rates and merchant fees. If there's an outrageous minimum then I understand your complaint but other than that complaining about this problem will only hurt small businesses and us if they don't support credit cards anymore.

[CharlesS]

Originally Posted by EndlessMac 

So if you prefer to use credit cards then you have to look at it from the merchant's point of view because as Chuckit said would you rather they not accept credit cards at all? That's the choice small businesses will have to make if everyone complained about credit card minimum purchases. You can't have it both ways on smaller priced items.

Well see, that's the thing. Unless there's some kind of minimum charge per transaction (if anyone knows this, please chime in), 2% is 2%. If I buy $5 worth of stuff, and then some other guy buys $5 worth of stuff, 2% of both our purchases adds up to the same amount as 2% of one purchase worth $10, right? It's just the distributive property of multiplication.

I don't see what would make anything any different if a purchase were small, unless of course there's a minimum charge that comes into effect if 2% is lower than some value.

[ort888]

I think in some cases there is a minimum charge. I'm pretty sure there used to be anyway. It may have changed in the last decade., I don't know. The weird thing is that they negotiate very different rates with different companies. McDonalds is paying Visa a lot less then the corner deli. Probably half as much. Maybe less.

When my old company had to get set up to accept credit cards, the fees were astronomical. We had a job from a certain organization that had very strict rules on payment, and had to pay by credit cards, and just getting set up to accept cards was going to cost us a few thousand dollars, plus we were working in such small numbers that each charge was going to cut out about 5% of our profit.

All this said, I use my check card everywhere. It's just too convenient. Everyone does.

[EndlessMac]

Originally Posted by CharlesS 

Well see, that's the thing. Unless there's some kind of minimum charge per transaction

I always thought there was a minimum service charge from Visa. I know that eBay does.

[phantomdragonz]

most credit card companies SPECIFICALLY dont allow their users to have a "minimum" charge, so theoretically you can tattle on them and they would be in jeopardy of losing their contract with their CC processor.

EDIT: here is the verbage from VISA:
found here http://usa.visa.com/about_visa/ask_visa/index.html

Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge you a fee when you want to use your Visa card.

If you run into a problem like this with a merchant, please notify the financial institution that issued you your Visa card. These institutions have access to the appropriate Visa rules and regulations and can help you document and file your complaint. You'll find their address and/or telephone number on your Visa statement. Their telephone number may also appear on the back of the card itself.

Mastercard: found here:http://www.mastercard.com/us/busines...n/faq.html#211

MasterCard acceptance rule prohibits merchants that accept MasterCard cards from establishing any minimum amount below which the merchant won't accept payment via MasterCard card

this website has a lot of info on this subject
http://www.gofso.com/Premium/LE/06_l...rchants.html#B

-Zach

[Andrew Stephens]

This is one of the things I don't understand about the banks lack of profits/hard cash at the moment.

Even 10 years a go a sizeable amount of daily transactions were cash or cheque, now it's pretty much all credit or debit card.

That means that over the past 10 years the banks have quietly helped themselves to 2% of the economy of most western countries. Which as has been pointed out is a seriously large stash. I cannot believe they've blown it all on imaginary mortgages and candy!

But back OT. When I applied for a card processing facility there was no minimum fee but the monthly charge plus the % added up to quite a bite for the banks. I certainly wouldn't begrudge a small op the right to set a minimum amount. Don't forget that apart from the 2% charge, although the money is debits from YOU immediately, the shop won't see a penny for up to 60 days so will have to rely on either an overdraught or slowing payment to suppliers to create actual cashflow, both of which have further implications for their profitability.

Really the banks screw us ALL over with these card things. On a CC you will be paying 17% interest on money that the bank has not yet given over to the supplier, which is outrageous really.

[brassplayersrock²]

Out of curiosity to everyone, what is the max minimum you would be okay with? $1-$5 no more then $5?

Example, I know of a store here the minimum CC buy is $10. I don't shop there because of it. The Greek place around the corner is $5 but I'm okay with that.

[mindwaves]

There are a lot of places that I visit that have a minimum requirement. Most of these places are small stores though. I never thought that it was illegal though. However, I thought that the fee was $0.35 cents per transaction and not a percentage of the total price.

[ort888]

It's not illegal. It's against the rules set in place by the card companies.

HEre is an article that starts to give you an idea of how much these little shops are paying.

http://www.allbusiness.com/sales/int...ce/3918-1.html

[Eug]

Given that there's often a transaction fee billed to the merchants, I think a $10 minimum is perfectly reaasonable esp. for some small merchants, regardless of what the credit card companies' idiotic rules are.

Originally Posted by mindwaves 

There are a lot of places that I visit that have a minimum requirement. Most of these places are small stores though. I never thought that it was illegal though. However, I thought that the fee was $0.35 cents per transaction and not a percentage of the total price.

Don't assume it's 35 cents for everyone. For example, my city has parking meters that accept credit cards. Thus, the vast majority of their transactions are under $10, and many are under even $1. If they paid 35 cents every transaction, the city would be bankrupt already. It's really just what the 'vendor' can negotiate with the credit card company. IOW, it seems if you're a small vendor with low volume sales, you will get totally screwed by the credit card company.

P.S. Some credit card companies screw them more than others. American Express is a good example, as they usually charge even more. That said, I use my AmEx more than my Visa, purely for selfish reasons. My (no-fee) AmEx pays me 2% per transaction. My Visa pays me 1% per transaction. However, more stores accept Visa and Mastercard than AmEx, precisely because not only is supporting a 3rd card an added expense, it's one which is higher on a per transaction basis as well, despite delivering fewer customers than either Visa or Mastercard.

[brassplayersrock²]

What about the parking meters that cost $10,000.00 each?

[tooki]

Regardless of whether you think it's fair for a merchant to impose a fee or minimum amount, the merchant signed a merchant agreement, in which the merchant agreed not to do either of those things (among others). The merchant is violating the agreement they signed, causing hassle for the consumer, which is precisely what those rules are designed to prevent.

The other commonly-broken rule is demanding ID to complete the sale. Except in CA (where even asking is illegal), a merchant may ask for supplemental ID with a credit card, but as long as the card is signed, the merchant may not make the sale contingent on presentation of ID. So any time a store says they cannot complete the sale without seeing ID, they are breaking their merchant agreement (and law, in some states) and you can report them. That happened to Apple, which is why they no longer even ask to see ID.

[Eug]

Sometimes rules are broken, because those rules are unnecessarily rigid. Also, an easy way to get merchants to follow that can't-ask-for-minimum-charge rule is to lower the unnecessarily high transaction fees.

ie. Yeah, they may be breaking the rules, but ultimately, the blame falls on the credit card companies IMO.

[macintologist]

Originally Posted by tooki 

Regardless of whether you think it's fair for a merchant to impose a fee or minimum amount, the merchant signed a merchant agreement, in which the merchant agreed not to do either of those things (among others). The merchant is violating the agreement they signed, causing hassle for the consumer, which is precisely what those rules are designed to prevent.

The other commonly-broken rule is demanding ID to complete the sale. Except in CA (where even asking is illegal), a merchant may ask for supplemental ID with a credit card, but as long as the card is signed, the merchant may not make the sale contingent on presentation of ID. So any time a store says they cannot complete the sale without seeing ID, they are breaking their merchant agreement (and law, in some states) and you can report them. That happened to Apple, which is why they no longer even ask to see ID.

I specifically remember an Apple store employee asking for my ID when I paid with a CC. I was buying headphones I think, something inexpensive. This was back in 2005ish. They don't do that anymore?

[tooki]

Correct. http://www.ifoapplestore.com/db/2008...edit-purchase/ outlines what happened. (I can't divulge more without breaking NDA.)

[The Crook]

So, moral of the story here is:

• Mandatory minimums break credit card company rules;
• You can report businesses that enforce mandatory minimums; BUT
• You shouldn't because (1) credit card fees eat up a business's profit margin, especially for small purchases, and (2) oftentimes it's not difficult to just add something to the purchase to meet the minimum.

[TETENAL]

Originally Posted by tooki 

Correct. http://www.ifoapplestore.com/db/2008...edit-purchase/ outlines what happened. (I can't divulge more without breaking NDA.)

That's a most stupid rule VISA has there. Why would credit card companies not want retailers to detect fraud? And why would a customer refuse to show his ID? His name is on the card, so he has revealed his identity already anyway. You can not make an anonymous purchase with a credit card. As a customer I would be happy if a store would try to detect credit card fraud. It could have been my card that was stolen.

[brassplayersrock²]

Hence the move to CC with the persons picture on it. The store people don't need to ask for ID. it's right there on the card itself. it's a nice lil workaround; except in cases of alcohol. Been carded maybe twice the last 5 times, even with my picture CC.

[turtle777]

Originally Posted by TETENAL 

That's a most stupid rule VISA has there. Why would credit card companies not want retailers to detect fraud? And why would a customer refuse to show his ID? His name is on the card, so he has revealed his identity already anyway. You can not make an anonymous purchase with a credit card. As a customer I would be happy if a store would try to detect credit card fraud. It could have been my card that was stolen.

In general, regarding CC, the following is true:

The "system" itself is easily defeated and defrauded, however, fixing the system and making it safer would cost more than for the CC companies to pay for the fraud.

-t

[Amorya]

Originally Posted by CharlesS 

Well see, that's the thing. Unless there's some kind of minimum charge per transaction (if anyone knows this, please chime in), 2% is 2%.

For Streamline (one of the processors in the UK) the fees for credit cards are something like 2% plus 20p (but it's different for some cards), and debit cards are a flat 29p.

[brassplayersrock²]

good to see you again

[Andy8]

I never leave home without my Octopus.