Minimum purchase when using credit cards – Not OK!!

[karen]

OK, I’ve had it!! I keep hearing about gas prices and food prices and on and on. What about this little charge? Often a merchant will charge you an additional 35 or 50 cents if your purchase is under ten dollars, or some other amount. My math is not too good but isn’t that like 3-5% of the purchase price? So if you made several purchases a week with your debit card you could rack up a few bucks a week.

So, if you have a 15 gallon gas tank, and gas prices go up by 10 cents, you would pay $1.50 more per fill up. And if gas prices went up by 10 cents overnight we’d all freak out. However, that same $1.50 is about 3-5 purchases with a minimum charge added.

The thing is, it’s not allowed! Both Visa nad Mastercard specifically do NOT allow this. And while AmEx has no policy, they do not allow discrimination of their card over another, so by default, no charge can be added there.

I have tried multiple times to discuss this with store managers but I pretty much get a blank look and have to pay the fee if I want my merchandise.

Why are we accepting this? And I see more and more small businesses accessing this charge. I know that the cost of doing business is high but it is the cost of doing business.

Go ahead, check it out.

http://www.usa.visa.com/about_visa/ask_visa/index.html#anchor_4

http://d209886.u27.hsphere.clientsource.com/le-merchantabuse.php#2

http://www.aliverson.com/2007/03/credit-card-charge-minimums.html

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[beachdrivegirl]

You obviously have not worked at a small business or own a small business yourself otherwise this would not be an issue. This convenience fee is there because credit card companies charge businesses each time their credit card is swiped. Typically a small business owner figures the break even point and anything below that figure is charged the convenience fee. Personally I would rather see the small family owned businesses survive and will continue to pay them and not boycott them. If anything you need to be attacking the credit card companies and the credit card industry.

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[MargL]

Some small businesses – like Tony’s Fruit and Vegetables have a minimum purchase requirement before they’ll let you use your credit card. I think Tony’s likes the bill to be over $5 or something like that – otherwise it’s cash or check.

I haven’t run into charging an extra fee from merchants if your purchase is below X amount. What stores are you going to?

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[Erik]

At the risk of sounding classist, retro, provincial, sexist..etc, if it’s under $10 why not cash?

Retailers such as Sbux must have a large-volume discount from the card companies.

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[karen]

Yes, I did own my own small business and I did figure the cost of the credit card fees into my costs. The terms of being a Visa merchant (or MC or AmEx) are very clear, you can not charge this fee. If a small business does not like the terms, they don’t have to sign up with the credit card companies, they can accept cash or check. However, the terms are clear when they sign up, why do I have to pay for their choice?

Why not use cash? Because I don’t always have cash, and my debit card or credit card (should I choose to use it) is supposed to offer me the same convenience as cash. If I am choosing to use a CC, I am already paying a fee, in the form of my interest rates. If I am using a debit card, it is my money and should be accepted as money.

There are many stores in WS that charge this: there’s a coffee shop, a sub shop, a cupcake place, a small food place, a convenience store, etc.

The thing about attacking the CC industry is that this isn’t just your CC, it’s your debit, too. I’d love to see the CC companies enforce their own rules but have yet to get any response from them about any complaint that I have filed.

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[JanS]

Erik…I’m with you..cash works for me.

Now I understand where Karen is coming from…if it’s against the law for a CC to do it, then…they shouldn’t. Said business should figure out another way to recoop their charges. I accept CC’s, and I would never pass the fee that I pay on to my clients. It comes out on the other end…tax time..

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[JoB]

i have to agree that i am tired of getting nickeled and dimed by fees when i use my debit card.

i don’t carry cash for security reasons.. and because i spend less on debit.. my stomach crunches every time i swipe any card:(

but i now pay a fee to use my debit card several places…no matter what i spend.

and almost always at the gas pump… and i am too close to spending $100 there to be comfortable…

i am surprised that stores that installed do it yourself scanners for groceries haven’t begun to charge a fee for having an actual checker process your order.. but i suspect that is coming soon as well.

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[beachdrivegirl]

If a company has a debit card and credit card company reader then your debit card will not be charged the fee. However that costs a lot of money for some small businesses. Personally, I would rather see the small businesses succeed and shut down the Wal Marts of America. And of course credit card companies are going to be against that because it cuts into their profits. Do you think it is right that a bagel shop has the option of either a) losing customers because they do not accept a credit card or b)losing 50% of its profits for a bagel that costs a $1 because they have to pay $.50 for every transaction. I for one do not think small businesses should have to makes that choice. I will either a) carry cash or b) not shop there if i don’t like the fees. If you don’t like don’t shop their go to a more corporate America store.

Furthermore, if I were a cash paying customer, I don’t want to be responsible for paying other peoples credit card fees. And if merchants did not charge those fees they would have to absorb those costs from cash paying customers.

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[Robindianne]

Usually a lurker but wanted add: it’s not just the CC companies. It’s the CC processing companies. My son has a company that will take whatever the small business pays for processing of CCs and lower that rate (so he earns money from it and the business saves a bit). I believe anyone can start up a processing business and if the small business owner doesn’t realize they can “shop around” for processors, they can end up paying a huge amount each month or quarter.

I use debit because we are an e-commercey family and balance accounts and such online so even if it’s 25 cents, well OK not really 25 cents but you know what I mean, I want to know where it went so I can tell where I can cut back for savings for Walt Disney World :) So, I’m willing to pay (but why I don’t know as it’s crappy) extra to use my debit/credit cards, but will refuse to go to places that can’t/won’t take cards (unless they have really really good food and then I’ll go to an atm first:).

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[Magpie]

It is against visa/mastercard rules to charge an extra fee or to not take the card for a small purchase, however, they hardly ever do anything about it when a customer complains..what seems to be forgotten about the fees is that the Financial institution takes the entire hit if there is fraud. Unless it is an internet charge and the company doesn’t follow procedure, all stolen card fraud goes to the financial institution..even if it is obvious that a fraud has occurred (ie signature doesn’t even remotely match). As long as the signed document is there with an authorization code, the merchant will never be charged back, hence their protection is part of the fee structure (yeah, I know that you may think otherwise, but I have worked in finacial institutions for 30 years and unless there is some kind of really gross negligence on the part of the cardholder, they never have to pay a penny if there is fraud on their accounts and the merchant isn’t penalized either.) Just something to think about…but again, both a fee and a minimum purchase are against the rules that the merchant is supposed to follow. One caveat, pin transactions do not usually go through the Visa/Mastercard network, so a fee can possibly be charged and not against the rules, though the merchant pays about a third less for pin transactions than they do signature. The big merchants do get a break on their fees on the backs of the small merchants because of their volume.

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[austin]

The cigar shop by the safeway near the alaska junction sells really top butane for high end lighters. They’re the only place in the area that I’ve found that sells the good stuff. They charge an extra $.50 for a debit card purchase and I’m happy to pay.

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[beachdrivegirl]

Maybe everyone should carry cash. it will eliminate fees for those who dont want to pay them and also stop the “credit crisis” that is going on….

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[austin]

I carry cash when I can, but don’t have the right amount on hand all the time. Thank goodness for my extra fiver when I missed the bus outside BPP earlier!! Got me a stout.

How is carrying cash more of a security risk than a card again?

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[FullTilt]

We are looking into CC machines right now. The best, best we can find is 25 cents per transaction, plus 1.5 percent of the total transaction. So if you are trying to put 1.50 on your debit card, it just doesn’t make sense for the business to do it. Even the CC companies suggest charging a 50 cent transaction fee, or at least a minimum.

The little corner store by my house charges 50 cents per transaction. It used to really rub me. To the point that I stopped going there for a long time. Then I looked into having a CC terminal for my own business. I think I should go and apologize now. So I would suggest paying cash.

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[JanS]

yep, nice to know that cash still works…Full Tilt…can I bring quarters? ;-)

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[Anonymous]

I thought it was illegal for merchants to charge a fee to cover the cost. Ben and Jerry’s did this in the Junction for the few months they were in business. I don’t like businesses getting screwed by credit card and processing companies but if it’s the law then …

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[karen]

It’s not the law. It is part of the terms of becoming a CC merchant. The business can choose to accept CC or not, but if they do there are terms that they must comply with.

I am bothered that there seems to be a feeling that the poor little guy is being screwed so it’s OK to not honor the agreement that they made.

So, if it’s costly to obey the rules, I suppose you don’t have to.

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[Anonymous]

I hear ya Karen

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[JoB]

it’s not an easy proposition for anyone..

but if we are paying fees to process our debit cards and a portion of those fees really goes to insure the merchant against loss.. then i think all customers should share the cost of that loss protection.. just as all customers share the cost of shoplifting, bad checks and counterfeit money.

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[Sue]

Regardless of whether it’s allowed or not, merchants are going to do it if the market bears it – meaning that if people pay it and don’t complain to them about it, why should they stop? Now, I’m a person who won’t pull out a credit card for less than $10, and I refuse to use a card anywhere that I’d be charged a fee. But if the fee is bothersome and more people paid in cash and then said to the merchant “I’d love to use my credit card, but I won’t if you charge a fee for it” then they’d get the message and stop doing it. But as long as people do it, it’ll stay the same. It’s simple supply and demand.

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[JoB]

i just leave the store with all of my items on the checkout desk…

if i am going to be charged a fee for paying with the currency that is generally posted as acceptable in the front window as i enter.. i want to know that up front before i reach the checkout desk.

it is a lot of work for me to walk away and purchase somewhere else.. but it definately makes the point…

and yes, i do always ask to speak with the manager and state my case before i go.

if i don’t have the time or energy to make my case.. i make sure to buy only that which i really need.

i seldom pull out a debit card for less than $20..

and i have only walked away when they want to charge me a fee and will not take my local check.

I seldom offer cash when they won’t take my debit card without a fee. i just don’t need whatever it that bad.

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[vincent]

Maybe you poor people who cant afford transaction fees should just make yuban and home and quit your bellyachin.

If you cant figure out how to visit a bank or a AUTOMATED TELLER MACHINE its your own fault your paying the convenience tax.

Someone start a thread complaining about tipping while your at it.

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[Anonymous]

As Dave Chappelle said, “I’m rich, B#^@!#!” :)

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[Anonymous]

Why is it the persons fault who pays it and not the fault of the business who is breaking the contract? Maybe the parent paid the BS! “convenient” tax at Ben and Jerky’s because they didn’t want their kids to be let down because mom and dad had no cash in this day and age of almost a cashless society? I haven’t carried cash for probably 10 years because I charge everything, to get bonus points, then pay it off each month. It’s my way of making my money work for me but somehow it’s my fault?

I don’t pay surcharges, I just take my business elsewhere or else if I know I need cash, I will get cash back ahead of time or use an atm that doesn’t charge a fee.

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[vincent]

yes, carry cash

If this is a difficult concept try to avoid going out, or online discussions as neither of these appear to be strong points.

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