USPS Violates Credit Card Merchant Agreements

By requiring a minimum purchase amount, the US Postal service is in violation of its credit card merchant agreements. This is from page 14 of VISA’s:

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Reader Mike was miffed when he saw this. Why should he have to buy extra stamps? His letter is inside.

You would think that the United State Postal Service would behave better than an ice cream shop. — BEN POPKEN


Mike writes:

    “I was at USPS mailing things with their automated system. I only had 1 item. The item ended up costing my only 63 cents to ship. I thought it was going to be at least 2 dollars. So I said print the 63 cent stamp and was going to check out. I was not allowed, it said I had to spend at least a dollar. So I purchased a 39 cent stamp and checked out. However of course, I am not fond of being required to spend anymore than my intended purchase because I am using a credit card or debit card. Especially when it is someone huge like USPS and not some corner store. So USPS is breaking their merchant agreement with Visa by making me spend over $1.00 at their automatic mailing kiosks.”

Comments

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  1. bravo says:

    Just because that is the agreement that Visa requires most merchants to agree to doesn’t mean they required the USPS to agree to that language. The USPS is pretty big, so they likely have some sway when it comes to negotiating their agreements with companies like Visa.

  2. SteveJeltzFan says:

    That may be true, bravo, but I wonder how likely that is, given that the minimum is just $1. In mostinstances, companies have a $5 or $10 minimum. Now, it may be the case that $1 is the break-even point for USPS and they will not allow any transactions less than that via card.

    The more eggregious part of this post is that it involves a pre-programmed electronic kiosk – not a human.

  3. Hoss says:

    I really get pissed when any establishment refuses my credit purchase because it’s below there arbitrary minimum. It’s embarrassing when you’re in line with a $7 six-pack of beer (shaking with withdrawals) and the clerk says the minimum is $15 or whatever. This is the store’s policy — don’t believe them if they say it’s a bank policy or anything else. They don’t like the fees and are trying to cut costs by refusing credit for small purchases. More than a few stores have lost my business with this policy. (I’ve never gotten angry, will just ask if they will allow it this time — if not, have left without buying. And in either case have not returned.)

  4. georget99 says:

    Is this a minimum purchase for credit cards or all purchases?

  5. The Reviewer says:

    I am the fighter of the minimum purchase, first amy’s ice cream and then USPS. What will I find next. There is actually a place that I really like that requires a min purchase of 5 dollars, but they are a tiny place, one small shop and very cool people so I have never pushed it with them. But USPS. Gotta do it.

  6. The Reviewer says:

    George, all purchases have to be done with a credit card, so technically it’s both.

  7. tonycontento says:


    I side with the USPS on this one. They are supposed to be a not-for-profit federal agency, so if they would rather not lose money on purchases under $1.00, that’s fine with me.

    Especially if it keeps overall postage rates lower. Dig around in your car and use the coin-op machine next time, Mike.

  8. 24fan24 says:

    I think if this minimum is applied to all orders this does not violate Visa’s policy. Even if a credit card is the only method of payment, it would only be a violation if they allowed customers to purchase bellow the minimum amount by another means.

    For example if a store accepted cash and credit cards, but required every customer to buy at least $1, this would not be a violation of Visa’s policy because the minimum does not apply to amount that can be charged, it applies to the amount that can be purchased.

  9. ltflux says:

    it may just be that machine. i constantly use the USPS machine at my local post office to buy one 39 cent stamp and never get a minimum purchase thing.

  10. Spooty says:

    I always like to mention this link. which lets you turn in a merchant to Mastercard (I don’t know if Visa has an equivalent). It’s a very easy form to fill out. No need to explain your situation, just check the appropriate box for the kind of merchant violation (minimum purchase, maximum purchase, charging a fee, or requiring identification):

    http://www.mastercard.com/contactus/contactus_mv.html

  11. bravo says:

    I just read through the visa agreement and apparently a merchant cannot make showing a government ID a term of acceptance of payment with a Visa card. Next time I’m at Best Buy when they ask me for ID I’ll just say “nope.”

  12. Jory says:

    This happens all the time. AT&T Wireless had a “Minimum” amount on their website to pay your cell phone bill with a credit card, back before they were bought out. My roommate reported them and the minimum was gone the next day.

  13. MissPinkKate says:

    Huh, I saw that the other day too at the post office, but thought it was just the minimum purchase for the print out stamps (I really needed some 2 cent stamps, but the machine wouldn’t make them for me).

  14. Ben Popken says:

    Drew writes:

    “FYI, my understanding is that this is only a violation if the limit didn’t exist on that machine using other paying methods. After all, I couldn’t open a bag of candy corn at the store claiming I only wanted $0.02 worth of the candy charged to my Visa.”

  15. timmus says:

    What surprises me is not the tail wagging the dog (certainly Visa isn’t going to cut off a huge client like USPS), but rather the fact that the USPS is picking and choosing rules as they see fit.

    Speaking as a merchant, my impression is that the rules simply provide leverage for the banks to cut off troublesome or undesirable merchants, with as little recourse for them as possible.

  16. SecureLocation says:

    He was lucky to find a machine that would sell him postage at any price. The machines at my NYC post office are often out of service for 4 or 5 days at a time. Can you imagine a “real” business allowing their equipment to stay broken for that long? And being able to raise their prices any damn time they want?

  17. InsaneNewman says:

    I think 24fan24 has it exactly right… it’s not a credit card limit, it’s a minimum purchase in general.

  18. Mike_ says:

    Visa cardholders are supposed to be able to use their card wherever the Visa logo is displayed, without minimums or surcharges. There are exceptions, though. For example, some states require Visa to allow a “convenience fee” for municipalities that accept credit card payments for property taxes.

    I doubt Visa is in the habit of waiving their rules, even for major merchants. After all, if USPS can do it, so can Wal-Mart. And if Wal-Mart writes their own rules, then eventually everyone can. The system only works as long as cardholders know what that Visa logo in the window stands for.

    It’s possible that there is a statutory requirement for Visa to allow the Postal Service (a government-owned corporation) to set minimum charges. Or maybe the postal service is, in fact, breaking the rules. I’d be surprised if Visa is willingly letting them get away with it.

    Complain to Visa. AskVisaUSA@visa.com.

  19. punkrawka says:

    I agree with all who have said that this isn’t a violation. Violations are when merchants say “$1 minimum on credit card purchases,” not “$1 minimum on ANY purchase using this machine.” Even if the machine only accepts credit cards, I don’t think this falls under the merchant agreement.

  20. “The more eggregious part of this post is that it involves a pre-programmed electronic kiosk – not a human.”

    Oh, man, I LOVE that kiosk. In and out of my busy, understaffed urban post office in under two minutes with a ridiculously easy interface that does EVERYTHING the dudes behind the counter can do. I do all my registered legal mail with Mr. Kiosk. He’s much faster and I don’t have to explain to him how registered mail works. I’m visiting Mr. Kiosk tomorrow to mail my overseas Christmas stuff.

  21. informer says:

    Sorry Popken, you’ve made an ass of yourself once again. As many others have already said, this is only a violation if the minimum does not apply to other forms of payment. Why don’t you give Visa a call and ask?

  22. Christopher says:

    Bravo:

    Only do this if your card is signed. I work retail, and if a card is signed, I never ask for ID, I just check the signature (which is how everyone should do it). If the card is NOT signed, though, and the customer refuses to show ID when I ask, I refuse to accept it because of the whole “not valid unless signed” disclosure on the card.

    Also, as a side note, with Visa and Mastercard the signature can be for a different name than what is embossed on the front and it still must be accepted as long as the signature matches. It’s a quick way to add a card user without having to add them to the actual account. Amex & Discover require the signature be the same name as what is embossed on the front, though.

  23. Cactusjack_1999 says:

    Holy crap… My College has been doing this forever.

    They always have a minimum of a $5 purchase built into their credit card machines for some reason… Do you realize how much extra junk food I have to buy to get a cup o’noodle and a Mt. Dew cause I don’t feel like taking $10 out of the ATM!?

  24. SteveJeltzFan says:

    “The more eggregious part of this post is that it involves a pre-programmed electronic kiosk – not a human.”

    I agree with you, totally, Eyebrows McGee – the kiosk has made a visit to a post office bearable. My (poorly made) point, was that somehow this electronic kiosk has been programmed with a minimum charge amount, as opposed to that handwritten “Minimum $5 Charge” sign we see elsewhere.

    With the machine, you *can’t* do what you are legally allowed, a human *won’t* let you – I see the machine as the worse option.

  25. houdini says:

    SecureLocation: All businesses can raise their prices any time they want. Actually, government-run businesses are singular in their lack of ability to do so.

  26. FredTheCat says:

    Only do this if your card is signed. I work retail, and if a card is signed, I never ask for ID, I just check the signature (which is how everyone should do it). If the card is NOT signed, though, and the customer refuses to show ID when I ask, I refuse to accept it because of the whole “not valid unless signed” disclosure on the card.

    Uhhhh…WHAT!?! Explain to me exactly how having an arbitrary signature on the back of a card provides any proof that the holder of that card is that person. A responsible cashier will ALWAYS ask for ID regardless of the card being signed or not. This is for the CONSUMER’S protection.

    By signing the back of the card you ensure that a thief who happens upon your card knows how to recreate (or at least simulate) your signature. All it takes is one numbskull cashier to accept the signature as the only required proof of identity and the entire credit limit is theirs! Why give them even a HINT of what your signature looks like?

    I’ve not signed any of my cards in many years and always present my drivers license with the cards when using them. If somebody steals my card, fine, let ‘em make up a signature when they make their purchases…all the easier to prove you didn’t authorize the purchase when the bill comes.

    If you’re one of those folks who feel absolutely compelled to write something in the blank space on the back of your card, simply write “PLEASE CHECK ID”.

  27. brokenboy says:

    I believe if the signature on the receipt matches the one on the back of the card, you’re responsible for the charges. Thus not signing the card makes you more responsible when your card is stolen, not less. Have you read your terms and conditions carefully?

    If your system was real, anytime a credit card company asked if a purchase was yours, you could just send them a fake signature and say it wasn’t. At least by verifying against the back of the card there is some cross-check at the time of purchase.

  28. samdonaldson says:

    If there is one thing I have learned it is that the rules only apply to the little guy (or girl). I run into things like this all the time in my travels like being told I have to have to have not only ID, but the receipts as well for my traveller’s checks to cash one. It clearly states on the traveller’s checks that matching signatures is all that is required for ID.

    Also, at some stores like Walmart I have been told to present Identification when using debit on a card and correctly entering my pin number. This is not secure because the person at the checkout gets to get my address and social off my ID and/or the billing information for the card. Next all they have to do is look my name up in the phone book to get my telephone number.

    Back to the post. Myself I kinda side with the merchant in some cases because they are in between a rock and a hard place. I would find it hard to make a demand that someone accept my credit card in a transaction that costs them regardless of what their merchant agreement says with the likes of Visa, MasterCard, or American Express.