[Editor's note: this is all out of date as of July 2010 thanks to provisions in the Dodd-Frank Wall Street Reform and Consumer Protection financial reform bill that allow for minimum purchase prices up to $10.]
Last night I ordered out for Chinese food. My stomach and my wallet were calling out for General Tso’s chicken and fried dumplings. But I ended up pretty disappointed because of a misguided store policy at the restaurant.
This particular restaurant, Plum Blossom in Troy, NY, gladly took my order over the phone, but was less than happy to accept my Visa card when I arrived. Prominently posted in the store were inkjet-printed signs in front of the counter, on the counter, and on the wall behind the cashier, each affixed with clear packing tape. The signs read: “$15 minimum purchase on all debit/credit cards”. Egads, I thought; my order was less than $15. So when the cashier announced my total, I pulled out my Visa card anyway. He pointed to the sign and read it aloud.
I always carry some cash too, so I tendered up, but before I did, I asked, “So I can’t charge this, huh?” He read the sign to me again. I asked, “Do you know you’re not supposed to have minimum purchase amounts on credit card purchases?” He looked at me like I was retarded and asked, “What are you talking about?! We do; the sign’s right here.” I said back, “Just because you do it doesn’t mean you’re not supposed to, and I know for a fact you’re not supposed to.” And he said back to me, “Well we do.” Astounded by his persuasive abilities, I was more than happy to pay cash instead. But the blase attitude to my complaint was what made me more than happy to call my issuing bank when I got home.
Amazingly, the customer service agent I spoke with at my issuing bank agreed with the merchant. “I’m pretty sure they’re allowed to do that,” she said in an almost confident tone. “Are you sure, or are you guessing,” I asked. She paused and of course replied “I’d have to ask my supervisor to confirm that, sir.” I said that wasn’t necessary and decided I’d call Visa directly.
So I called Visa, and what happens? The person I spoke with also agreed with the merchant! I started to doubt myself. Did I just freak out at the Chinese restaurant guy for no reason? Was I on a sorely misguided but emotionally intense crusade not unlike a fundamentalist Christian neo-conservative supporting war? What happened last night?
Of course my close friends know that I’m never wrong, ever, and indeed, this held true yet again in this case. Right from the horse’s mouth:
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.
And for those of us with MasterCard:
Another 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.
Source:
MasterCard Small Business – Frequently Asked Questions
So I was right! I’ve just encountered uninformed employees one after another. I called Visa back, but before mentioning that I had found their own policy, I explained my story again from the beginning and this time, the customer service agent emphatically said, “Oh no, they can’t do that [minimum purchase amounts].” He transferred me to someone in Montreal so that they could take an incident report. What this had to do with Montreal, I have no idea. In any event, the Visa agent gladly took down my name and the restaurant’s name. I didn’t ask what would happen to the restaurant owner, but I assume they’d send a warning letter first and then cancel their merchant account if they get another complaint.
Tough luck for me trying to use my Visa card, and tough luck for Plum Blossom getting called in for making it my tough luck.
Was the Plum Blossom requiring minimum purchase amounts to simply defy Visa policy? Probably not. In all likelihood, the owners said to themselves, “Self, these Visa merchant fees sure do add up! Applying Adam Smith’s economic principles, I should be minimizing my costs to continue to provide low cost to my consumer. Therefore, I will refuse credit cards on transactions in which I believe the credit card to be a costly form of doing business, and everybody will benefit.” Of course, I’m being maudlin, but the principle is probably true: that the Chinese restaurant simply would go out of business if they had to actually pay $.30 + 2.9% of my $12 charge (grand total: 65 cents) everytime somebody placed an order like mine. Again, I’m being facetious, but come on, if you’re going to take Visa, you’re obviously going to have to submit to their merchant fee gouging.
To the merchants that say, (French voice over) “Le sigh, but I have to pay so much money to zee Visa.” Tough luck. You don’t have to take Visa at all if it’s costing you so much money. But you take Visa because you want more business — specifically from people that use Visa cards! So take the damn Visa card, because you agreed to it. I charge almost everything because frankly, it’s more secure than carrying around an assload of cash. My credit card has been charged both fraudulently and mistakenly, and in both cases, the charges were righted in my favor. Placing a charge on some credit cards also doubles a manufacturer’s warranty or includes free theft insurance (check with your Bank — read your cardholder agreement unlike the merchant here that failed to read their agreement with Visa).
I won’t charge purchases under $5 generally because of merchant charges — I don’t want to impose that on small businesses, and I can actually understand that losing $.30 on a $1 or $2 transaction can make a sale a loss. The corollary to this is that I love using my card for minor purchases at big box stores. The true test: could I charge a penny. What better place to test this than a Walmart? At a nearby Walmart, I went to the candy section, and grabbed two peanut M&Ms — not bags of M&Ms, but two peanut M&Ms. I didn’t bother bagging it since I knew the candy shells would only melt in my mouth, not in my hands. At the self-service checkout, I proceeded through the menus to weigh my non-barcoded item, and per the machine’s directions, placed the item on the scale (only one — I ate the other, whoops!). The total: $.01. The form of payment: credit card. Indeed, the machine gladly authorized my card for $.01 and proceeded to print my receipt. The paper on the receipt and the duty cycle to the checkout machine probably almost cost that much, not to mention the heat that I let out the doors by walking into the building.
If costs of doing business get too high, raise your prices. No business would tack on a “receipt charge” or a “opened-the-door-and-let-out-heat/cold” charge, but we let merchants get away with “credit card fees”. The next time this happens to you, tell the merchant that they’re in the wrong, and see what they say. If they cave into your pressure and take your card, that’s all well and good, but someone will still be in that same scenario another time. Consider calling Visa and reporting the merchant. In this case, I only reported this restaurant because they were so complacent in telling me that was just their policy, but if they were pleasant it might have made me more hesitant to call Visa.
You can call Visa at (800) VISA-911 (847-2911), and MasterCard at (800) MC-ASSIST (622-7747).
61 responses so far ↓
1 Ben S. // Oct 27, 2006 at 1:30 pm
Thank you! I’m glad you reported them. I’m so sick of miminum purchase b.s. Like you said, if you don’t like Visa’s (or any credit card) rules don’t use them.
2 columbia // Oct 31, 2006 at 5:48 pm
I just Googled my way onto your blog, trying to find out how to complain about this exact practice today! However the merchant in my case was even more blase – it’s a local bagel place I go to 2X a week, usually with larger orders. Today I passed by and wanted a bagel and soda – $4.83. The minumum (in this case no sign posted) was $5.00. I didn’t have any cash. This became an interesting discussion (full disclosure, I used to work at a major financial institution). They eventually rang my purchase, after the “manager” said I was stealing from the poor owner by not having cash, which I countered that they were stealing from Visa.
However, she gave me the owner’s cell. Which I called, to ask if he was aware he was violating the mercant agreement. He said he was totally aware he was violating the merchant agreement, had already gotten in trouble once for a minimum sign, but was just “hoping” that customers would “help him out” but not charging less than $5. He also stated that he wasn’t ever going to change his policy, and Visa would have to shut him down to get him to change.
3 AgentSkelly // Nov 13, 2006 at 12:03 pm
Pete: Accountants love cashless payment methods…I know that for a fact.
But back on track, there’s a electronics parts store here for the longest time had a $5.00 minimum charge. One day when I was in there the store owner was ringing me up and I mentioned to him the no minimum charge thing. He said to me “Really? Let me go look at my merchant contract!” Sure enough he pulls it out and reads through it again and notices it does say that and guess what? Takes the sign down!
I always found Visa’s customer service good. When I went to Toronto once and paid for a ticket on GO Transit on my Visa Check Card, I noticed that my full account number was printed. When I got back to my computer, I emailed Visa. Visa responded with “Yes, the card number should be truncated on the receipt, but a few merchants have been grandfathered in for various reasons such as equipment limitations. However, GO TRANSIT is not one of these merchants and we will be speaking with them about this.”
4 Carrie // Nov 20, 2006 at 6:04 pm
This posting was very helpful, I just left a mini mart in my area (though I left a Jewel Osco most recently after refusing to purchase any more than I needed to meet the minimum) that refused to take my card. I knew that they weren’t supposed to do that, but didn’t have the info to back it up. I can totally see why merchants would try to save money this way, but as a customer who frequents said mini-mart 3 to 4 times a week, it’s somewhat infuriating. I use the ATM, I pay the inflated mini-mart prices, I buy everything from wine to butter – and NEVER with cash. If I need to make a $7 charge once in a while instead of my normal $15+, cut me some slack! Next time I will go in armed and ready and see what they have to say…
5 Brendan // Jan 2, 2007 at 9:24 am
Found your site through the wefunk radio link.
I’ve noticed that this practice is more the norm then not in my area. Which is southern maine. If I were to call up visa on everybody that didn’t follow the rule. there wouldn’t be many stores left .
thank you for pointing this out.
6 Futuregirl // Jan 7, 2007 at 4:41 am
Hi, Pete. I just want to say that I think that what u did w/the Peanut M&Ms was totally brilliant!!! I just totally cracked up when reading about your experience. U’d think that most technology is a plus in today’s society…but apparently not all of it is….I myself didn’t know that merchants weren’t allowed to do what u mentioned in your post. I will definitely point out what u said the next time I see a “$_ minimun purchase with a debit/credit card” sign, & then see what they say. By the way, it’s really cool that u got a response from the band that u wrote an open letter to. They sound like nice, open-minded guys. Well, just want to also let u know that my little webpg. is NOTHING as big or as organized as your site, but feel free to visit it, (& post a comment) if you want. So, I look 4ward to reading your future blog posts! Sincerely, a fan.
7 angry in texas // Jan 27, 2007 at 12:57 pm
What pisses me off is, yes I do purchase below 5 dollars, I am limited on income and have to go get milk and or other things, hell even a cola on the way home from work after a long day. I get to this mom and pop store to get a cup of coffee that’s like 3.95 for a tall or small (very small tall compared to a tall starbucks coffee). It wsnt that good to begin with since he used his “personal recepie” I didnt drink all of it but paid too much for it. This mom and pop runned coffee house needs a lesson in making a good cup of joe.
back on topic:
I gave him my visa debit credit card and he smiled at me “5 dollars” I said “what?!” he was like “five dollars only..minimum” I said “can i write a check?” he laughed “Five dollars” I said “the only cash I have is for gas!” he repeated it and I said “nice place you have, I may be back, but I doubt it..I hope to hell can get home becuase of your taxing..” I dug out my gas money, luckily I ran into a friend who lent me the money to pay for gas.
Am I angry? hell yes I am angry. I nearly threw a 300 cola back at the heartz girl at the window when i’d gotten off work late, was tired and all I had to pay was with my debit..visa of course. She was hatefull and bulligerant to me..in a snotty way said “I only accept five dollars, sorry I cant take your card.” I said “yes you can it’s all I have” she said “give me the cola..if you cant pay” I snatched my card back to her and shoved the cola on the counter cursing her out. I was beond angry!
I called to speak with the manager, they didnt know my cell phone number, this same snotty teenager answered in a smart ass tone “yes??” I hung up on her and called back untill someone else answered, this time I said “ohh by the way I went to sonic and got my soda, they didnt charge me for something I dont want to pay..and your window girl is a bitch!! tell her to get a grip and not treat debit card payers like idiots! it isnt my fault your stealing from potential customers..I WONT BE BACK!”
Iam beond angry..this grocery store I live near in the small town I live in, I have shopped there since the damn place opened, I went to get a gallon of milk and the stupid teenager that was too busy smarting off to customers said with a chuckle “five dollars, sorry” i said “I DONT NEED FIVE DOLLARS WORTH OF GROCERIES..JUST MILK..DONT TELL ME YOU WONT TAKE MY CARD AFTER YEARS OF USING IT HERE?!” she seemed entertained at my expense. when I called the manger, who was nearly illiterate, the teenager said “since we have ohh so many managers here..she wants to speak to you” I said to this manager “youve lost my business, Ive shopped your grocery store for as little or as much as I want and you NEVER DENY MY SALE..now you say I have to pay you five dollars minimmum..IM NOT COMING BACK AND YOUVE LOST MY BUSINESS!!!!! AND TELL YOUR STUPID EMPLOYEE TO QUIT MOUTHING ABOUT ME OR ILL COME MAKE HER STOP!”
I dont know what to do..I mean this is illegal! surely merchants will be told to stop by the government soon or later for stealing from the consumer?! It’s my debit, I shouldnt have to pay any less or more than I want…
something needs to happen to these merchants stealing from the customer…
8 Renee // May 30, 2007 at 7:17 pm
Thank you for your post. I just left Bonnertown Mkt. in Five Points,Tn. so mad I could spit nails.I sent my son to the store to buy 2 20 oz Mt. Dews with my master card. He came back with 5 because they wouldn’t let him buy just 2 with my card {they started a $5.00 min}.I went back up there and told them they could not force people to buy more then they wanted just to use their cards.She told me there was nothing she could do. So now I printed the Q & A on the visa and master card sites and I’m going back in the morning to give it to them.
9 G // Jun 3, 2007 at 4:50 pm
They are not supposed to set minimum purchase amount. But they can have discount for cash purchases. According to Calif law, it is legal to do so. Then, what if they set the price, let say 30 cents high per item. And in big sign by the price tag, saying 30 cents off using cash, or if you spent more than $5, you’ll get same discount as cash, then it is legal to do so. Which one is better?
the law actually set “no min. sign”. But, merchant if they want, they can do other. People should know that the problem is VISA/ Master/ And Amex, not merchant.
Especially, most of merchant with min. sign is small business. What do you expect from that? You can screw them up, but if you think about economy, you should think little bit more. To keep the law and to keep the profit, they gotta raise the price. And you’re the one who gotta pay for.
10 peteru // Jun 3, 2007 at 6:24 pm
G, you are correct that merchants can set a “cash discount” as long as it is advertised as so. But it’s interesting that you don’t see it very frequently anymore, although it used to be popular with gas stations especially.
As far as credit cards forcing businesses to raise prices, I think you would find competitive pressure from cash customers keeps prices stable. Don’t forget there is an upside for the business owner as well, as cash is expensive to handle in its own right. This is why grocery stores especially offer cash-back on debit purchases — it takes cash out of the store and puts it right in the bank.
11 Lucy // Jun 6, 2007 at 4:57 pm
I just had a $5.00 minimum experience today.
I was at a small-town Hardware Hank in the next town over. after being denied the use of my credit card for the bitty $3.49 purchase (a bicycle inner tube), I ended up spending an additional $26.00 for a storage box with drawers.
I wasn’t mad, but when the clerk/manager told me that he is charged $1.00 for the transaction fee, I said that I would look into it.
Well, I have. And I just got off the phone with Visa, after initiating an incident report, or whatever they call it. I feel the same as the rest of you…I don’t like to be forced to purchase more than I intend to. Thanks for the info. Pete!
12 Tracy // Jun 15, 2007 at 10:42 am
Well guess what I own a small gas station and we don’t charge a minimum fee. Now because of such high gas prices, we will start to have a minimum fee. It’s not the businesses fault you don’t carry cash. It’s not the businesses fault gas is so high. But when some one wants 1.00 worth of gas and uses a credit or debit card and we get charged 4% of that 1.00. WE LOSE MONEY! I’m not in business to lose I’m in business to make. And if 500 people get 1.00 worth of gas in one day it wasn’t worth opening the doors! I’m sick of people who think the business owes them! Always wanting more for the money! Well we don’t make but 1 – 2 cents per gallon! WHOOOPIE….that’s life. You want to use the credit or debit card then you can pay the price of the charges. If not USE CASH! And checks huh we won’t even go there. You know it’s bad when you write and you get a letter after it bounces. GROW UP PEOPLE! You have to actually work to get paid! I see it this way if you don’t have it DON’T CHARGE IT!
13 peteru // Jun 15, 2007 at 4:04 pm
Tracy,
You’re missing the point completely. We pay you. You work for us. And furthermore, you sell gasoline — so with the price of gas you’re full of it saying people are charging $1 at a time. $1 isn’t even a half gallon these days. You don’t like credit card fees? Don’t take credit cards, and see if you do better for yourself. I wish you the best no matter what you decide to do. But the fact that you take credit cards — even grudgingly — speaks volumes about the power of the credit companies to suck you in! Plus nothing about my article said businesses should take checks — just that merchants like you should shut up and suck it up or stop dealing with credit cards entirely. But if you agree to their terms, you can’t make up your own. And finally, don’t assume everyone charging to credit cards is spending money they don’t have. I’ve never carried a balance in my life. Read my article about using credit to your advantage, then see if your outlook on credit is the same!
Peter
14 Lucy // Jun 19, 2007 at 4:19 pm
Peter…
My thoughts exactly!
And by the way, I use my World Perks card for nearly every purchase. I don’t carry a balance either. I like the 2-3 airline tickets per year that I can get. For me, it’s a better deal than cash-back.
And I really like not having to pull out cash – something I rarely need to carry anymore.
When the day comes that gas pumps, grocery stores, Paypal, hotels and Walmart no longer accept credit cards, I’ll go back to ATM’s.
15 Lucy // Jun 19, 2007 at 4:38 pm
One other thing…
If Tracy the “business” owner finds that the $20 in credit card costs for 500 customers purchasing $1 of gas per day, puts them out of business, she shouldn’t be in that location – much less – in any business at all.
Here’s a crying towel…
16 Sheshe // Jul 15, 2007 at 10:52 am
I just saw a minimum purchase sign at a store a couple of days ago. I was making a $30 purchase so I was fine but when I pointed out that the $5 min purchase was against the law the woman said, “Well, I’m going to keep doing it until someone tells me otherwise.” I had to wonder… wasn’t I someone?
17 mike // Jul 25, 2007 at 8:29 pm
This is a fun argument with the high-school register-jocky .. I’ve been in the local Quick-E-Mart with the relevent pages of Visa/Mastercard corporate FAQ in hand because I was bored and wanted to cause trouble.
ultimately, every encounter results in them recanting and allowing the transaction (usually after consulting the 300lb manager .. who’s name invariably ends in ‘a’ and looks like her mother filled out the birth certificate with a handfull of Alpha-Bits).
18 Brandon // Sep 13, 2007 at 12:17 pm
You guys are saying all this because you have NO EXPERIENCE as a merchant.
Think about how many people use card these days.
They probably go through hundreds or even thousands of them using card on small purchases like $1 or $2 which would end up hunderds of dollar in just fee itself by end of the day. for what? to make $.25 or $.50 profit….
….c’mon….give me a break…
Go to your nearest ATM machine and get yourself some cash for god sake….at least a dollar or two!
if we’re talking about $10~$20 minimun….that’s quite understandable….but we’re talking $5 minimum guys…..FIVE freaken dollar!!!! Think about the profit that merchant would make after all those rediculous fees….
19 peteru // Sep 13, 2007 at 9:02 pm
Actually Brandon, I’ve dealt with fees worse than this since I sell things on eBay and accept Paypal. By the time the dust settles, it can be more than 10% of the sale. I also sell things on Amazon.com, which takes a cut of about 5% or 6%. So 3% or 4% is nothing in comparison for Visa, Mastercard, Discover, and American Express, and if you pay that much in fees, you have a bad merchant service provider. As if so many people are coming in charging $1 or $2, very few people do that at any store. Feel free to discourage customers from doing that. Or even better, protest the fees by not accepting the cards and letting your customers know why. But you and cardholders both agree to credit card company rules, and one of the rules merchants must follow is accepting the card universally.
20 PhillieBlunt // Sep 17, 2007 at 7:14 am
I’m also a merchant. I always thought a $5 minimum purchase is fair for both the customer and the retailer. Be for real folks, if you dont have $5 bucks in ur pocket you definitely need to do lots of budgeting and/or get a second job. You can fill these pages with nonsense excuses but bottom line is minimum purchase of $5 isnt a lot to ask. Comparing apples to oranges like Walmart to an independent c-store is ignorant. To the rest of the merchant keep ur policies, because our $5 minimum deters these petty purchasers. Send them to walmart to by those 2 bottle of soda pop on credit card or $2 gas! who needs them! Just concentrate on the good loyal customers.
21 peteru // Sep 17, 2007 at 2:41 pm
PhillieBlunt, if you can believe it, I too find the merchant fees on credit card transactions to be out of line. But it’s one thing to disagree: you are advocating breech of contract. So if you turn away someone that read this, and decides to contact their creditor, don’t be upset if you lose your merchant terminal! If you read my story, I was denied on a $12 sale, I wasn’t charging a bottle of soda or $2 in gas. I recognize the problem and even try to avoid it when possible.
Part of the irony of your chosen user name is that I bet, if you sell them, you sell Philly’s for about $1. Have you ever been offered a credit card for a $1 sale? Even the US Postal Service has a $1 minimum purchase for credit card and debit card charges at their automated postal centers — which, also, is out of line with the creditor merchant agreements. Why not call and complain to your merchant provider if you disagree? Not all merchant providers are equal. But again, you’re putting your business at risk by choosing to break your contract, and that’s something you should seriously reconsider in my opinion.
22 Kevin Humphries // Oct 9, 2007 at 1:53 pm
As an accountant, I can tell you that the credit/debit card percentages that a merchant pays are the same – regardless of the amount. So, how is 4% or 4 cents on a dollar going to break a merchant on a $5.00 minimum purchase? A merchant spends the same 4% commission a $100 purchase. It you ask me, it’s all hogwash and a minimum purchase is a manipulative way to extort more money from costumers. I hate to say this, but I tend to stay away from dirty, dingy, convenient stores owned by immigrants because of this.
23 Mark // Oct 17, 2007 at 8:40 pm
I’m going to agree with the fact that yes it sucks that the business owner loses money and its only fair that they request transactions over $5, however, if I am a regular at a store and one day I want something just under, isn’t it worth a loss to keep a repeating customer happy and coming back to eat it one day?
24 Michael Hammond // Oct 27, 2007 at 10:06 pm
I just hand them this document I made up one day, and surprisingly, it’s made a difference locally. A big difference. A myspace community soon to follow.
(a pdf that references visa and mastercards rules (and cites them) with a little mission statement to make it sound much more convincing that they will be reported by more than just 1 person.)
here: http://download149.mediafire.com/gfxmtucztxng/exzeceenxxk/credit-card-violators.pdf
if that don’t work, here:
http://www.mediafire.com/?exzeceenxxk
25 Redblazer // Nov 14, 2007 at 1:58 pm
A percentage fee on a credit card is not a big deal, but when a customer comes into my store and wants to use a debit card for a purchase that is less than $1.50, I feel a bit offended and used since I pay a flat 30 cents per transaction on debit cards, not a percentage. I have never refused a transaction, but why don’t you see the merit of having cash for very small purchases? Also the overheard costs of running a store front business can not begin to compare to running an ebay business.
26 Will // Dec 12, 2007 at 4:21 pm
If the merchant fees are such a problem you should kindly inform the customer that you lose a little money for each transaction under a certain amount and ask them to please avoid purchasing under said amount in the future.
If they are a regular customer they will probably not do it again, or only when they have to. If it’s not a regular customer well, then, screw ‘em.
27 Citizens Against Minimum Purchase // Dec 16, 2007 at 11:26 am
I read your thoughts regarding the minimum purchase amount to use credit cards. This has been a long standing problem without a way to combat it -until now. While Visa and Mastercard take the report and get results, there has never been a group to follow-up with the consumer to let them know the problem is solved. We recently launched “Citizens Against Minimum Purchase.†Feel free to visit out website http://www.citizensagainstminimumpurchase.com. The site was established to give consumers a voice against minimum purchase amounts. On the site you can also report establishments that have a minimum purchase requirement. Please email us if you have any questions or would like additional information.
Citizens Against Minimum Purchase
http://www.citizensagainstminimumpurchase.com
info@citizensagainstminimumpurchase.com
28 Anna // Dec 18, 2007 at 3:20 pm
I can understand the dilemma of the small merchants, but having the sign up and actually enforcing the rule when someone is short of cash are two different things. Today I went to a dry cleaner that I frequent to pick up 6.50 order. They told me the “under 10″ rule and pointed out the ATM at 7-11 across the street. I look sternly and said, “I do not have the cash right now, but I have this Visa. I am not going to get charged $2.00 in atm fees to pay this bill. Please take this Visa.” Remembering that I am a good customer, they took the card. My next statement would have been, “Is it worth losing my business over this?” and after that I would have never returned, and reported them to Visa. I think this is how I will handle this in the future since it seemed to work well.
[Editor: Anna, funny you should mention dry cleaners. My dry cleaners are a mom-and-pop operation, and as a regular, I make sure I pay in cash. You were polite about it and they responded by doing the right thing (accepting the card). Maybe every merchant with a minimum purchase amount just needs their own ATM.]
29 MamaToBe // Dec 27, 2007 at 10:10 am
Just because someone is paying with a credit card, or in my case a Visa Check Card, does not mean they are poor, can’t budget, etc. In fact it is quite the opposite. I use my Visa Check Card for everything because I can easily track where each dollar is spent using online banking, which downloads data right into my budgeting software on my home computer. I can’t do that with cash purchases. This worked wonders for my husband and me when we were saving for our house.
I work for a home builder at a construction site where we have subcontractors coming in and out all day long. Even with a lock on my desk I have had my purse stolen twice. The cash that was in my wallet could not be recovered, but any charges the thieves made on my card were refunded to me by Visa. For that reason, and the one mentioned above, I never carry cash except for a few bucks for bridge tolls.
I ran into a problem with a local bakery I frequent this morning. Typically I go in there to purchase pastries for my entire office, or cakes for birthdays and other occasions. They even made my wedding cake. Well today I was just purchasing for myself and the total came to $4, but they have a minimum of $5 so they refused my Visa Check Card. You can bet I was mad. Denying the woman who is pregnant with twins her breakfast is not a good idea, especially after giving them thousands of dollars in business over the years. Now my card suddenly isn’t good enough unless it’s for $5 minimum. Having just paid my bridge toll I didn’t have any cash, so I was unable to purchase my breakfast. I will just take my business elsewhere from now on and report them to Visa.
30 Teresa // Jan 27, 2008 at 9:54 pm
Many of you keep using the term “forced” when referring to purchases. As in, “I was forced to purchase more than I wanted.” Unless they had a gun to your head, nobody “forced” you to do anything. You could have walked out the door at any time and not purchased anything, am I right? That is your right as a consumer. Why are you trying, no, looking for a reason to hurt the small business owner? You have no idea the amount paid in credit card/debit card transaction fees monthly by a small business. It is astronomical in some instances. You should be more upset that because of theses unreasonable fees issued by the credit card companies (usually a percentage) and the card issuing banks(usually a flat fee on top of the percentage) it will furthur aid in the undoing of all small businesses. Do you really want Walmart to be your only choice to shop? Or any other big box store for that matter? Do you really want big oil company owned gas stations to be your only choice. Mom and Pop stores help keep these companies honest, if only on a small scale. Come on people, what happened to standing up for the little guy? Have a little compassion. If not, don’t worry, those little stores you are all complaining about won’t be there for too much longer. And it won’t be because you called Visa and complained.
31 Credit Card Customers // Feb 22, 2008 at 9:58 pm
Like What Visa Told a person that the merchant could not set a minimum amount at his or her establishment. As always before you open mouth to insert foot check the FDIC Law in which it say yes that one can set minimum amount of purchase.
Love card holders who use it buy stick of gum and think cash not the way to go. In fact one can still your card and run up more charges before you can stop that card use. So I carry my cash and would rather loose Hundred Dollars than try to dill with phone operators.
So every one uses them and one day every one jumps of the bridge I guess since every ones doing it you should too. While my feet will still be on hard ground got love ya .
I like the fact everyone who comes in my location can’t read No credit cards or Debit Cards that on the Front Door ,and pull that lovely peace of plastic out. No wonder this country economy in a slump people can’t read.
32 Credit Card Customers // Feb 22, 2008 at 10:19 pm
Teresa
Thank God people Like you are still Around.
I all most thought they all have perished to the life take Visa brain wash scam.
Stand tall it not all lost yet hope just might live free.
33 Mills // Mar 22, 2008 at 8:40 am
If you cant afford to cover the Visa’s fees’s then stop taking Visa. When you lose 30% of your business you will wish you still took Visa.
Everyone saying we should look the other way for mom and pop shops .. Get with it! So it is ok to get screwed by the small store when you know Walmart will not? That is the problem with Mom and pop stores , they have an entitlement issue. I will shop at the location I am least likely to get screwed.
BTW Since you guys are all for breaking the rules how do you feel about ebay fee’s? Is it ok to end the auction early and not pay the final value fees o save 3%? Rules are rules. If you cant follow them you should not accept the agreement. Sometimes you have to LOSE $$$ on some transaction to make more $$ on larger transactions.
34 Begonia // Apr 3, 2008 at 6:40 pm
I am a small service provider merchant. I don’t mind at all accepting the small purchase or the large purchase. I looked long and hard to find my merchant provider that charged lower fees. I have a very low percentage and my fees are tiered. They were made for the small business person. There are more and more of those providers out there everyday. Even Sam’s Club has gotten part of the program and offers a fine reasonable deal. If I couldn’t afford to take a debit card for a small job, then I sure can’t afford to take one for the larger job. Percentages are percentages. You figure your profit by the total SALES not just one sale. By the same token, I want to use my debit card and not cash. If I carried the cash I spend, I stand to have it stolen. Cards are safer. I use my debit card very carefully…..it is the same as writing a check, yet much more convienent. If I choose to use my credit card, that is my business. As a rule I do not carry a balance on my credit card so I think I am using it responsibly.
35 David // Jun 11, 2008 at 9:55 am
As a consumer, it seems to me that by putting a minimum on charges, businesses are actually shooting themselves in the foot. I mean, if a small business won’t let me charge something, I don’t fuss about it, I just go somewhere else that will. I remember one time, a take-out place wouldn’t let me charge $9. I never went there again; not because I had a grudge, but because when I got hungry I wouldn’t associate that place with having food, because my past experience with them resulted in me not getting any food. It wasn’t intentional, but more like a subcontious decision. If businesses refuse a sale, they may be losing a customer for good. This may be naive, but If I ran a business, I would welcome all the business I could get, because with more sales, comes more people, more referals, more money.
36 Paul // Jul 19, 2008 at 10:21 am
Flash Taco in Wicker Park Chicago – I ordered $7 worth of food, and when I pulled out my card the guy points to the sign saying credit cards require a $10 minimum. TEN dollars…at a fast food place??? Uh, I’m not THAT hungry and don’t need any more tacos! Ridiculous. And now, thanks to this blog…reported.
37 Camilo // Jul 28, 2008 at 11:48 pm
Nice narration..
38 Dareyl // Jul 30, 2008 at 2:08 am
I understand there is a problem with the fees, but you need to remember demanding a minimum is just not right, i can see both sides of the story , but its still wrong to put such demands, $5. or $10. every time we use our cards adds up real fast, and i dont really like the idea of buying something that i don’t want,, makes no sense either, we can dispute this all we can, but nothing will come of it, so the best thing i can say to the store owners is find a better deal with someone that has a better percentage, someone said no one put a gun to our head to buy more than we wanted for the minimum, well your right about that but i feel my right as an american to live on the land of free has been stepped on real hard, and i agree with someone saying the stores should welcome all sales of any amount little or even the larger ones, just because thats how you build your bussiness , better with people that likes to shop with you than to watch from across the street building there business with your protential customers,, right? If feel im saving money buying from your store im dedicated to your store, but if i feel your not a pleasent place to deal with, well lets see how long you last in your business, these store cannot asked or make any demands on how much i need to spend, those are the people i will report ,
39 Matt // Jul 30, 2008 at 4:40 pm
I live near a gas station that has a $5.00 minimum purchase sign up…Deep down i KNEW that was illigal and told the cashier, “if i come in here and demand money from you, im robbing you…how is what your doing any different” So I called 1800-Visa911 option 6 and reported them. its like…you shop here but we are going to tell you how much you can spend. screw that! If u need more information go to your local bank branch office and pick up a packet of this information…next time someone gives you this crap pull it out and demand to speak to their supervisor
40 Dareyl // Jul 31, 2008 at 9:21 am
If we just walked in a store and they have a minimum charge weather its a taco place or just any store that we walked in, i realy believe walking out and not going back is just not going to fix this problem,,we need to warn the store keepers that what there doing is wrong and if they don’t change it then we need to report them,,,,,remember this is a fight for our rights and no one should step on them , and there are other people that i would like to protect from this when they walk in the same place, we may not ever be heros ,but we can make a difference,, you got to remember this is our money we are talking about,,,its not our fault that the stores don’t shop around for the better deals on the CC companies, this would make them do that to care more about there customers and there bussiness.
41 sandy // Aug 15, 2008 at 10:32 am
maybe you would understand better if you owned a business yourself.
[Editor's reply: I've paid the $.30 + 3% plus monthly fees like everyone else. If you can't take the heat, get out of the kitchen.]
42 brian // Sep 5, 2008 at 8:01 am
i just got here from google, looking for information on minimum charges being wrong. thanks for doing this research. i use my card for everything, and i can’t stand when i have to pay minimum amounts.
43 Vince // Sep 6, 2008 at 9:07 am
I should be able to use my visa for a $1 purchase. Saying I need to get another job, or get to an ATM if I can’t carry a few bucks in my pocket, the fact is I shouldn’t have to carry any money. My visa is my debt card. I’m not using credit, it takes money right from my checking, it is as good as cash.
44 victoria // Sep 11, 2008 at 1:40 pm
i just complained about a ups store in my area. I go to this store all the time, i try to abide by their $5 minimum but sometimes I just don’t have the small change to mail an envelope.
If they would post a note saying, they would “prefer” a $5 minimum as to “require,” people might try to help out . Yet they were more than happy to watch me walk out on the sale, before i confronted them about the policy being illegal, so i had no problem placing the complaint.
45 Marnen Laibow-Koser // Sep 19, 2008 at 6:50 am
Good article — thanks for spreading the awareness that minimum purchase requirements are prohibited by MasterCard and Visa. I’ve created a blog (for now; a better interface is in development) to identify merchants who violate this policy — check it out at http://minimumpurchase.livejournal.com !
46 Irked!!! // Sep 24, 2008 at 4:58 am
Hey how about not selling anything under your minimum… (I know this is not gonna work for gas sales) but for items like candy bars. Get rid of them, don’t sell an item that is gonna sell for less than your minimum. OR ABIDE by the rules!!! You don’t wanna accept a card for the small sales, then you’re not getting my business on the big sales. Screw you. End of story. If wal-mart and the “big box stores” are the only ones willing to abide by the contract of the CC companies than mom-and-pop can say goodbye! See ya.
47 Jen // Nov 10, 2008 at 10:07 am
Walmart and the other big box companies are wiling to abide by the contract because their average sales per customer is well above the amount needed to make sure it is a profit transaction when a customer swipes their card. When your average sale per customer is under $10, then you don’t have all of the big transactions to balance out those $1 or $2 dollar transactions.
I am a retailer and we do not have a transaction minimum because of the rules. I am considering a sign suggesting customers not use their cards for under a certain amount because it causes me to lose money. I would even consider not taking credit or debit cards, but VISA and Mastercard have done such an awesome job convincing the world that they can’t function without them that it would hurt me. Until I come up with a better solution, I will continue to allow VISA/MC and the processing companies to raise their rates and fees all the time (at least 3 times this year). I will continue to pay all of the random fees they come up with.
Did you know that when you use a “miles” card that it is the retailer who pays for those miles? Yep, there is an additional fee the retailer pays when you use those cards.
You may have noticed, the cash discount has been making a come back.
When we are working on setting retails on items, we often say we would have gone with a lower margin, but we have to factor in the credit card charges.
I have seen some people say that retailers should just accept the fees as a cost of doing business. Most things like that are passed on to the consumer in one way or another. I could tell the customer to accept a minimum purchase amount or a service fee as a convience charge.
Instead, I try to factor it into my cost of doing business. I have raised my markup to account for that, along with the cost of the equipment to process (has to be updated every few years), the phone/DSL line needed for it, the time spent dealing with fraud/chargebacks, the extra paper for the duplicate receipt copy, etc.
As a consumer, I try not to put businesses in that position. I love my debit card and use it for many of my purchases. I do try to have some cash on me at all times though. Partly b/c the network always seems to be down at the worst possible moment, and partly b/c I don’t like to make small charges on my debit/credit cards. Unless I am at Walmart. Then I will use my card for the smallest of purchases. They have done so many things to mess with the US economy that I love to intentionally stick it to them. I try to avoid going there whenever possible, but if I must, then I will at least try to take them for something. I loved the $.01 purchase.
[Editor's reply: Perhaps the most insightful comment posted on this page.]
48 Robert // Dec 4, 2008 at 11:46 am
Ok, I as most of you, got to this site by checking on minium card charges. Everyone that said that the Merchant has a contract to take the CC is correct and the merchant should have a profit magin built into his prices. If I buy a 1 dollar candy bar or 6 of them for 6 dollars, doesn’t the merchant loose money? Hmmm. By the way, some of you say you are mechants and raise your prices to accomadate the CC fees, when Obama stops taxing 95 percent of the people and starts taxing the 5 percent, aren’t these five percent business owners in some form? Ok, I don’t pay taxes to the government directly, I pay more for gas, bread, milk, etc. so the $250,000 a year business man can pay his taxes. Grab your toes and hang on people.
49 Kris // Feb 21, 2009 at 4:32 pm
Why made the bank rich and small business suffer cost? I can understand using credit card for defer payment but using debit card and making the bank wealthy is nonsense and wasteful.
50 retailer // Jun 21, 2009 at 4:52 pm
You are hurting the small business when you use a your credit card to purchase e.g a $ 2 candy , the retailer gets charged by the credit card merchants so retailer makes nothing or even suffers loss, So feel good about it, You accomplished good
[Editor's reply: No one in this story said anything about a $2 candy. This started over a $10 meal.]
51 Chris // Sep 27, 2009 at 9:40 am
I’m pleased that you posted this article and provided relevant links to Visa and Mastercard. I went to a bar in Washington, DC that has a $25 minimum. Not only did I think this is atrociously high, but given all they sell is liquor and alcohol it encourages patron to drink more than they might have otherwise and potentially increases the likelihood of intoxication and drunk driving.
52 bob // Oct 7, 2009 at 6:19 pm
Perfect! I just about lost it today I ordered breakfast and a coffee, the total $4.63 the cashier said we have a $5.00 minimum purchase, I dug up enough change for my coffee and said forget the rest . I knew it wasn’t right but nothing to back myself up. I can’t wait to go back there, say goodbuy to 50.00 to 75.00 dollars I’ve been spending for breakfast and lunch not to mention the other 30 or so coworkers on the construction site that I will pass this onto. Way to Go GET N GO in Durham , Maine
53 Jeff // Nov 18, 2009 at 11:52 pm
I work at a bar and grill in california and my boss just started a 20$ min for costumers who want to pay with credit cards.
I dindnt think it was a big deal at first, till a reglur costumer told me that bussness owner are not aloud to do that, so I found this site and read all the comments, and was suprized how many people are up set with is issue.
I dont wan to be the bad guy I just do what my boss tells me to do.
Its been about a week scense my boss started to do this and had one complant aready, Iam sure there would be many to come.
He also just put an atm machine in the resturant so iam suspose to till costumers to use the atm if the dont have more than 20$ on them, but like my self I dont like using atm’s that are not owed by my bank.
All well I just go to my job and deal with it, if a get yelled yet.
Fot the costumers is not my fault sorry guys.
Thanks for this site.
54 Kipp // Mar 13, 2010 at 9:50 am
Peace. First of all, let me start by disclosing that I am a business owner and have been for years. I’m a tax account, though…not a retail merchant. I’m aware of the various dynamics that lead to the dissenting views in this discussion.
That said, I’ve been angered by a local (Robbins, IL) gas station’s NEW policy that denied me service because I didn’t have any cash on me. It’s not that I haven’t seen this before. I live in a very poor community, and this practice is common in the hood. A community so poor that we were jumping up and down while the gas station was under construction. Recently, our library was in danger of shutting down until native NBA superstar Dwyane Wade’s charitable foundation stepped in (Thanks, Bro). And, everyone I know in this community visits the gas station regularly. I’ve stopped their regularly since its inception a few years ago.
But now, all of sudden, my money isn’t good enough if its below a certain amount. The reason I’m angry is because it doesn’t matter that I’m a regular and faithful customer. It doesn’t matter that they made the (sound) business decision to open in a poor neighborhood. It doesn’t matter that they made the (sound) business decision to accept debit and credit.
And, that’s kinda my point. This company received very favorable tax (mostly local) considerations to be convinced to set up shop here. It made good business sense to decided to accept credit and debit cards. It is never a net negative transaction. Not Ever!
So stop with the stand up for the little guy nonsense. Because, I am. The owners of this gas station do not live in this community. And, their contribution to the local economy has been negligible to this point. No one who lives here works there. And, I already mentioned the tax considerations.
It just FEELS (my admission of a hyper-emotional point of view) like an outsider has the only show in town, and is leveraging their monopolistic powers to extort the people of my community. I felt powerless with my $4+ handful of needed (mostly caffeinated) goods and no other choice but to buy something else.
And, as I alluded to before, this practice is common in poorer communities. And, I do understand the economics of these transactions. Heck, there’s another smaller store in my town that has a minimum fee. It’s more centrally located, so it doesn’t benefit from the “drive thru” traffic the gas station has from its location on a busy corner. They’re minimum is only $3. I try to go with cash when I can. But, when I don’t have the cash on me, I spend the minimum and then some, usually while feeling grateful that I could use my debit at such a low-budget (affectionately referred) operation. I’d imagine that the owners of this location are from the same neighborhood as the gas station owners. That’s said this “Corner Store” FEELS more like a part of our local community. This much lower sales volume store even hired a neighbor of mine to work at the store. He takes his granddaughter to work with him on the weekends and she hangs out behind the counter with the store owners. They hire random crackheads to do odd jobs around the store.
While the gas station is blaring the popular “urban” radio stations over the PA, this store keeps their one TV locked on Al-Jazeera. Yet, shopping their still feels local.
55 Minimum Purchase on Debit/Credit Card Transactions … | Jack's Money Saving Blog // Mar 25, 2010 at 10:10 am
[...] from: Minimum Purchase on Debit/Credit Card Transactions … Share and [...]
56 robert // Aug 14, 2010 at 2:30 pm
This happens all the time at gas stations. Especially those owned by Middle Eastern folks. I went into one and they said “Five dolla minimum”. I said “You can’t do that, it’s in my cardholder agreement, you can’t do that, it’s against the rules! I am going to report you!”
I called VISA 911 number and they were glad to take my complaint and asked what result I would like. I asked for the gas station to be fined! So any time a company tries to do this to you call Visa or Mastercard and report them and ask for them to be fined!
[Editor's reply: Thanks for taking the time to share your experience. If everyone reported every merchant that did this, I'm sure this practice would stop. Since I wrote this article, my policy has been only to report egregious merchants - ones with unreasonably high limits (saw $15 minimum recently in NYC, and hell yes I reported it), ones who try to slap on fees to cover their fees, or those who are just flat out rude about it. Interestingly I recently learned the state of New York's taxation department skirts these rules by accepting credit card payments only through third party vendors who charge a "convenience fee". Jerks!]
57 kay Thompson // Aug 24, 2010 at 8:18 am
A merchant told me that we will no longer be able to use cards for purchases $10 or less. He said it was some kind of new law that was going into effect soon. So I googled the subject and found this website. I clicked on the link above and it says retailers may require a minimum purchase amount!!! The exact opposite of what this site is talking about! I copied and pasted the blurb below:
Minimum Purchase – U.S. retailers may require a minimum purchase amount on credit card transactions. The minimum purchase amount must not exceed $10 and does not apply to transactions made with a debit card.
[Editor's reply: It's one thing when a merchant sucks it up and says, "it hurts our bottom line," it's a whole other thing when they try to pull fleece over your eyes telling you about some new "law" just to excuse their behavior.]
58 amanda owens // Feb 21, 2011 at 8:05 pm
lmao.. really i would wanna see a merchant server come fine or shut down a business. they will say that they will, but will NEVER do so. they lose business and business is money.. there money is more important than a call in about a 10 minimum charge. i guess you guys are not business owners so you wouldnt know. also if a business dont accept credit cards, it just makes you stop at the atm to pull cash out and then the merchant will even love that more.. cuz its cash. im not a merchant but i was reading and wanted to put my 2 sense in.. smh!! lol. btw walmart is a big corp they have money and you can swipe all day for all they care, but be considerate to other small business owners. but anyways i feel that way sometimes when i go to places and they do that. i always carry cash. and another thing is when you use your credit cards now a days, some people swipe or steal your card and someone else can be using it at the same time while your eating or sleeping. i guess what im trying to say is everyone needs to choose there own battles of what they like to fuss about…. why live life the way you guys do.. loosen up and live it to the fullest. who knows when you will die. over a 10 minimum.. hmmmm
[Editor's reply: Actually, I have been in business for myself since 2008, and although I am not in retail, I do appreciate the plight of small businesses versus the credit card networks. However, this entire article is all moot now - Federal law now prohibits credit card networks from disallowing minimum credit card transactions. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act amended the Electronic Fund Transfer Act of 1978. Prior to this, merchants were required by law to accept transactions as small as $.01 (one cent). So, I'll quit worrying about minimum purchases if you do too! We have to just accept that now that the law is on their side, that's just the way it is until further notice.]
59 jASON kELLER // Jun 25, 2011 at 3:55 am
Yeah looks like Visa (but not Mastercard) has caved and said that MPRs up to $10 are okay.
http://usa.visa.com/about_visa/ask_visa/index.html#anchor_4
[Editor's reply: This all changed with the passing of the Dodd-Frank Wall Street Reform and Consumer Protection financial reform bill in July of 2010. I've updated the top of the article to make it clear that it's now out-of-date.]
60 Jim Foster // Jul 29, 2011 at 7:07 am
MC charges 1.75% plus .12c on every transaction.
Discover 1.89% plus .15c on every transaction.
All debit .60% plus .18c on every transaction.
Its ridiculous what the merchant companies are charging, and the government is allowing it to happen. Time for reform. I have a simple solution, I quit taking cards at my stores put in a ATM and my business is booming, At first customers were mad now they agree I love it… Comsumers assume it is the retailers that are screwing them do the math I’m selling you a .99c bottle of soda how much profit do you think i really make on it and the merchant company charges me 1.75% plus .12c..
[Editor's reply: As a fellow small business owner, I think this is a fair and appropriate response, but one that each business owner has to weigh the benefits of themselves. Personally, I continue to accept credit cards, however, my business (computer services) has both a high price and high margin (since the "product" is generally labor by the hour). On the other hand, my favorite pizzeria did exactly what you said: replace their merchant POS with an ATM. To be fair, I never use ATMs or debit cards, so there have been times when I went to another pizzeria because I didn't have the cash. However, I'm more than happy to support their choice to run a cash-only business and more importantly, the owners seem to be happier all the time - probably because they're making more money now!]
61 Mr. O // Nov 8, 2011 at 10:08 am
The link says… so it would seem that they can charge a minimum purchase amount. I also agree with the implied idea of the author that we should be at least somewhat reasonable with small business owners when the amount of the minimum purchase is reasonable. If I spend a $1 and visa takes $.30+29%…the business owner just lost took a huge hit. It adds up.
Leave a Comment