Are small businesses allowed to require customers charge a minimum for credit card transactions (e.g. >$10)?

I have no idea on the legality of it, but do you know the reasoning behind it?

I visit a gas station that requires a $5 min. I imagine it's to reduce/avoid the fees they pay to the cc companies?

According to the standard merchant agreement they are not allowed to require a minimum purchase.

Merchants try to do this because they are charged a minimum fee per transaction plus a %. So, if the fee is .50 (I have no idea what the actual fee is) plus 2%, then on a purchase of 3.00 the merchant may lose money.

Many merchants in my area seem to have a sign the requests a minimum purchase amount but they will run your card for lesser amounts. I personally always honor the request.

In MA it is illegal to charge someone extra to use a credit card, but you just get around it by imposing a minimum for credit card use. under a certain amount (usually 5 or 10 bucks) you have to pay cash.

By law they cannot. But realize that the bank & credit card companies take such a large percentage that small family owned restaurants are not making much money without setting a minimum purchase. The credit card companies control Congress. In many countries laws limit fees charged to merchants but not in the US.

I thought Big Oil controlled Congress?

From the Mastercard site:

"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."

From the Visa site:

"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."

In most states, it's not a matter of law but a matter of the contractual merchant agreement. From the citations above, Visa and Mastercard apparently differ on the issue. I didn't know that myself until I looked it up. Of course, some merchants will try to get away with minimums even if you are using Mastercard and you may have to complain.

I also saw a report recently that there is federal legislation in the works to allow merchants to set a minimum for debit transactions.

Thanks. I use Mastercard. i gonna complain next time.

The financial reform has a amendment that allows them to do this. It also alows them to offer discounts if you use cash.

The merchants pay a fee to use the card and end up losing money on small sales, this just allows them to not be forced to do it. The banks forces them to accept losses in order to accept cards at all. They were screwed either way.

faisofdoij wrote:

I thought Big Oil controlled Congress?

??? No, if they did then they could drill in more places, don't forget that more than 50% of the country is off limits for oil and gas exploration

faisofdoij wrote:

I thought Big Oil controlled Congress?

Anyone with lots of money and a willingness to spend it on congressmen owns congress...Big Oil, Credit Companies, Unions, lawyers groups, etc...

do the CEOs run for Congress?

faisofdoij wrote:

I thought Big Oil controlled Congress?

Actually I have been told UncleB controls congress.

Naughty by Naature wrote:

Thanks. I use Mastercard. i gonna complain next time.

They're small businesses trying to survive. If you use a credit card on such a small bill, they're losing money. If they're polite about it, you shouldn't be rude. Now if they're not polite... that's just poor customer service and you should probably not go back.

I believe you will be correct as of July 22, 2011 as a matter of law. My interpretation of the difference in language at the Mastercard and Visa sites is that Visa has gone ahead and changed its contractual policy in advance of the effective date while Mastercard has not done so."Effective July 22, 2011 · Merchants will be able to set minimum amounts for credit card usage as long as the minimum does not exceed $10 per transaction (i.e. you no longer have to accept credit cards for purchases under $10 but you cannot set higher minimum payment levels such as $15 or $25) and you cannot differentiate between bank issuers or card networks (i.e. you cannot set a $10 minimum for use of a Visa card but not for a Discover card)."http://www.sdra.org/blog.aspx?itemid=111

not now wrote:

The financial reform has a amendment that allows them to do this. It also alows them to offer discounts if you use cash.

The merchants pay a fee to use the card and end up losing money on small sales, this just allows them to not be forced to do it. The banks forces them to accept losses in order to accept cards at all. They were screwed either way.

The banks, i.e. rothchilds & the queen etc, control congress. The same people own the oil companies, pharma, chemical companies etc.

There was a guy around here a couple decades ago with a big sign in his window that said NO CREDIT CARDS. We wondered if he lost any business, but probably not. He hated the cards, with good reason. They had no business trying to steal his hard work.

Recently a local gas station, that has reasonably good prices, stopped taking credit cards. I saw that as a good move on their part, and appreciate the opportunity to pay cash instead of using a card.

J.R. is right on about the Rothchilds etc... Read "The Creature From Jekyll Island"

Anyway I own a small family business (2 locations) and credit cards have become an annoying necessity. We are closeout retailers where volume of sales through extremely low pricing is the goal. It’s frustrating when a customer brings a stick of Old Spice deodorant for $1.79, something that is $4.59 at any pharmacy, and wants to pay with a credit card. First of all we have so many deals you couldn’t find anything else to buy and save money? You might say accommodate your customer and we often look past our $5 min, but when we are busy these small credit card sales slow everything down. Unlike commercials that show fast transactions, its faster for our cashiers to make change then wait for the transaction to go through and get signatures (not to mention service fees and 3%). Some credit card machines are faster than others but you know what I don’t want to spend $2000 per register, $600 enough. Then that person writes “check ID” on their card but doesn’t have the ID ready so you have to wait for them to break it out of their wallet/purse. I would say once a week I have a customer tell me it’s against law to have a min and they are calling the cops. My response is always the same, “If J.C. himself walked in here and told me what to do in my store I’d tell him to go *&%#@ himself”. Good thing I’m also the head of the HR and PR dept ha-ha.

J.R. wrote:

There was a guy around here a couple decades ago with a big sign in his window that said NO CREDIT CARDS. We wondered if he lost any business, but probably not. He hated the cards, with good reason. They had no business trying to steal his hard work.

Recently a local gas station, that has reasonably good prices, stopped taking credit cards. I saw that as a good move on their part, and appreciate the opportunity to pay cash instead of using a card.

1) Chances are he DID lose some business, but he made a decision that the hassle/cost of accepting credit cards outweighed the additional revenue.

2) Other gas stations don't allow you the opportunity to pay cash?

MC, rather than JC, is who you have to worry about.