I once wrote to Visa about this exact problem, and they did exactly NOTHING. This is why merchants do it: there is no action taken when they do it and they know it.

Since you can't charge for credit card use per the merchant agreement is it a violation of the merchant agreement to deny any debit/credit purchase below a certain threshold? I've been denied a transaction, on more than one occasion, on the basis that, "We don't take debit/credit for anything below $5."

Upon seeing this, I would refuse to pay at all and walk away leaving them holding the food. There are plenty of places to eat within a mile or so radius, 99 percent of them better, so the inconvenience to me is minimal, the cost practically nothing, and the cost to the... I won't dignify McD's by calling it a restaurant... is basically that they have to throw my custom order away, since they can't legally re-serve food that has already been served. (Yeah, I'm sure they do it anyway in some cases, but that's what a fast food worker told me they do if a customer walks away without paying.) So their choice, eat the 25 cents, or the whole cost of my meal.

@mindshadow: Yes, it is. A nearby gas station stopped me from using my card to buy a soda (I usually try to pay cash on small things anyway, but I only had change).
After that, it prompted me to look it up, and I now have a printout of that part of the merchant agreement in my wallet.

In Florida, it's not only a violation of the merchant agreement, but it's also illegal (see Section 501.0117, Florida Statutes).

Don't know about other states . . .

It's a violation, but Invalid's right in that the cc companies don't do shit about it. I've reported numerous bars & clubs in my city that 'won't take cc for less that $10'. They haven't changed in 4 years. Fuck them.

@Invalid_User_Name: Wonder if complaining to the FTC/Fair Trade Commission would do any good. Don't they handle complaints of this variety, particularly if the credit card companies aren't doing their part? They have a handy "File a Complaint" page on their website: [www.ftccomplaintassistant.gov] And their consumer information section covers rights of credit card holders.

.25 cents is 1/4 of a penny...what's the big deal? :P

>>... is basically that they have to throw my custom order away, since they can't legally re-serve food that has already been served. (Yeah, I'm sure they do it anyway in some cases, but that's what a fast food worker told me they do if a customer walks away without paying.) So their choice, eat the 25 cents, or the whole cost of my meal<<<

They are never going to prepare your meal before you pay. I too would most likely be eating elsewhere, or at least talking to the owner.

I have the exact same issues with every McD's in Oakland Ca charge 75 cents EXTRA to use credit or debit. I complained to VISA, McD's corporate, and this individual McD's owner, and got no where with any of them. Though the particular own did send a rude letter back though the BBB.

One of my favorite restaurants around here has a 75-cent surcharge for credit card transactions, and I'm torn about it. I want to report it because I know it's against the merchant agreement, but if losing their ability to accept Visa/MC for purchases (which I'm assuming a dispute would eventually lead to if it didn't stop?) would kill their business, that's not really something I'm interested in causing, either.

@rmz: Have you tried talking to the restaurant owners or managers? You could try and convince them to change the policy before they get in trouble.

@rmz: Or pay in cash next time you eat there.

My workplace doesnt do this. I dont mind the minimum purchase thing but the arbitrary charge pisses me off.
But maybe if the credit/debit companies stopped charging businesses for the transactions and just worried about raping us on interest these companies wouldnt have to do it. If you buy a pack of gum with a debit card you can actually cost them money with your transaction.

Visa et al are squeezing them from one side and cutting into their revenue to make life easier for their customers. Sadly, their customers don't seem all that keen on making life easier for them. Damned if you, Damned if you don't.

Can you guys post the merchant agreement on here? I have no idea where to look for it. I could definitely benefit from having it in my wallet.

@Angryrider: Yeah, but it doesn't change the fact that they have the policy, even if it doesn't directly impact me. The principle of the thing and all.

I'm going to take the side of the merchant as I am one and can shed some light on this situation.

The problem is that VISA/MASTERCARD advertise to the masses that it's uncool to pay with cash/check and "cool" to charge EVERYTHING even if it's $1.

Well, what's happening is just that. People are charging EVERYTHING even if it's 75cents and guess what...THE MERCHANT DOESN'T SEE ANY OF IT OR WORSE. There's a fixed cost PLUS a % of the transaction that the banks charge and there are MANY TIMES where the merchant will actually LOSE money on small purchases. In an economy as sketched out as it is Making ZERO or LESS per transaction is just asinine.

If the credit card companies want people to charge every little transaction then they need to DROP THE MINIMUM PAYMENTS. I personally don't understand why there isn't a class action suit against these bastards for advertising this way.

Debt transactions (while they can be cheaper to process) still cost money and are really no better for the merchant if the sales are under $5 or so.

Can't really blame the customer for doing what they think is the correct way but do yourself a favor and watch the face of the store owner when you try to run the card for a $2 coffee and you'll see ANGER IN DEM EYES but it's not at you. It's at the scum that is VISA/MASTERCARD.

I've reported a local restaurant that charges an additional $0.35 per credit transaction. Absolutely nothing has changed in the following months. The restaurant still charges the fee. So, I don't pay by credit there any more.

MasterCard and Visa are not going to be cancel anyone's credit card agreement for something like this. The credit card companies still want their cards used.

One of my favorite places where I went to school charged 50 cents to process a credit card. Never really bothered me since it was a small local place and was delicious. A lot of times I would rather pay that than run next door and pay $4 at the ATM to get money out to buy lunch.

If you don't like the fee, don't pay them. It really is that simple.

ive seen a lot of gas station quick stops, (especially asian/east-indian/1st gen immigrant owned/managed...) that tend to have the "no cc below $10.00" policy and I've always wondered if that was legal to do that.

I have also wondered why they dont just charge the 4% (thats what they told me the CC fee was) to my purchase amount if I was willing to eat it(considering that 4% of $9.99 is < than 40c thats a small premium to pay for the convenience of using a cc).

What will just wind up happening is that ALL transactions will get an added fee. Never added as another line item, of course, but added in the form of higher prices.

@RChris173: I had to scroll up to check on that, good catch. 0.25¢ isn't worth worrying about. If they try to charge you $0.25 extra, you can tell them their sign is incorrect and not pay the extra quarter...

Make a big scene, that's the way I roll, unless there's a cop around, like there was last time something like this happened to me.

I don't blame them. If CC companies charge for using their cards, the merchant should be able to say so, and charge more, instead of charging everyone more.

@mebaman:

Wow, did not know that. Good info! I know a lot of places around here (small restaurants, usually) that try the fee thing. I'll have to remind them.

What is the solution here? No business should have to lose money on small transactions, even the CC companies (even if they are the DEBIL!).

The credit card companies are at fault with this. It's frigging ridiculous to expect the merchant to eat the cost of the transaction fees. I own my own biz and take payment mainly by cash or check, but when I do take cc payment, I pass the 2.9% fee directly to the customer.

Keep your receipt and chargeback the fee. It's not like Visa will tell you 'No'.

That, and since Visa will talk to the merchant, I'm sure the topic of "you can't do that" will come up. Yes, it's a PIA, but I bet they won't surcharge anymore...

@JoeTan: Sure, I understand that, but aren't the small losses here and there balanced out by the fact that a lot of people would shop there who wouldn't otherwise and then spend more? That's the principle behind loss leaders, isn't it. I never carry around cash anymore, so I just wouldn't shop at someplace who didn't accept cards.

Sorry if this is a repost...

Cash is king. And as the economy continues to slump, be prepared to get penalized for using your card vs. a few years ago when you actually benefitted from them. NOTE: the last depression we experienced had people burying money in their backyards. Not really sure where I was going with that now damnit! I'll post again if I remember.

@A.W.E.S.O.M.-O:

I don't know, but if those people that wouldn't shop there otherwise are also using plastic, and you are a business where the sales tend to be small (coffee shops, fast foods), I can see where it could have the opposite effect.

Illegal possibly, but I don't have much issue with the stores. The sign is clearly posted and you do have the choice of not buying the product or spending over the $5 if the 25¢ bothers you.
The one thing that seems bothersome is that the CC companies charge unfairly. It would be more fair to charge a % of total sales rather than a transaction fee. The merchants should be complaining about the transaction fees. If they can't change the way CC companies charge then they should just raise prices enough to cover their costs. Everyone is happy, no fees to the customer and the merchant makes money.

I hate to play devils advocate here, but for the most part we are talking surcharges of less than $0.50 here. What can you really get now that costs that? A pack of gum?

Many of the bars here in LA have minimums for credit cards, but most of them are around $10. And LA being LA, that isn't even two drinks at most places. I always figured it was because they didn't want to have to report all the income from $7 bottles of Amstel, but I guess I was wrong.

It seems like the real villains in this aren't necessarily the shop owners posting these surcharges, its the CC companies hitting them up for both a percentage of the transaction and a fixed cost per. JoeTan makes a good point.

Still, a few weeks ago I tried to go an entire week without using any credit card. Not only do you not have to worry about crap like this, but its way easier to visualize how much money you waste on crap and booze (well for me booze).

Wow! check out the "Convince fee" section of the Visa agreement and then think about Ticketmaster... "MUST adhere to the following: -The fee is being charged for a bona fide convenience of using an alternative payment channel outside of the merchants normal business practice". So how can ticketmaster claim that all it's online transactions are outside of it's normal business practice when 90% of their ticket sales are online? They might have been in the clear 10 YEARS ago when they used to have most of their sales at actual ticket booths. This is cut and dry violation, and a multi-million dollar one- because often that "convenience" fee is more than half the price of the ticket. We all need to do something about this, who's with me?

actually, according to the merchant agreement at
[usa.visa.com]

it looks like they are allowed to charge a "convenience fee" but not a "surcharge". the difference is subject to some restrictions:
an alternate form of pay must be offered (yep - cash)
must be disclosed to the customer as a charge of convenience for the alternate pay method (yep - the note on the machine)
must be flat or fixed amt regardless of transaction (yep 25 cents)
is included as part of the total transaction (yep)
assessed by the merchant providing the transaction and not a third party (yep)
cannot be added to a recurring transaction (n/a)
is applied to all forms of payment in the alternate payment channel (meaning credit cards - yep)
the ONLY restriction it is unclear on is this one:
is applied only to non face-to-face transactions.
presumably, this credit card thing in the picture is at the counter, and this IS a face-to-face transaction, other than that this seems to be perfectly acceptable... be warned

The Hallmark I was in last night had a paper sign saying 'no credit cards for purchases under $5.' Most of what they sell is under $5!!
And the ARCO gas stations in SoCal all charge $.45 to use a credit card.

@drftjgoj: well when you're a merchant, and you process hundreds or thousands of transactions a day, it turns into hundreds or thousands of dollars.

i guess you don't mind getting fleeced "just a little bit", but it's only that kind of mindset that allows them to collect substantial dollar amounts.

LET'S GET READY TO RUUUUUMMMMMMLLLLLLLLE!!!

@Alipaps: that on the other hand is a clear violation of the rules,
it states:

"Always honor valid Visa cards in your acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules."

My mastercard and visa fee is 3%. I do not pay a transaction fee on top of that. $.50 or $500 it is still 3% I would think McD's pays a smaller %. I see no reason to charge more for a small purchase.

@skatastrophe:

Are you sure that they are saying you have to spend at least $10 to use a credit card or are they saying that all tabs that are started will be charged at least $10? Because any time I've ever seen something like that at a bar, it was the latter.

It is NOT illegal.

NOT.

NOT.

NOT.

The merchant is using a 3rd party processing company to handle CC transactions. Most fastfood places outsource their CC processing to a 3rd party to avoid the cost of accepting CC's (the CC hit), provide faster payments to the vendor, avoid the upfront costs of the processing terminals plus allowing the vendor to accept a wider range of cards with fewer problems.

3rd parties generate their income from a processing charge that can be paid by the merchant OR added to the consumer's transaction amounts. IF added to the consumer's transaction amount the fees are specifically allowed per the CC rules IF the transaction fee is disclosed in writing on the signature receipt or the transaction terminal.

It stinks. It is slimy. I won't use my card with any vendor that outsources their CC transactions. But is not illegal or against any CC rules. Regarding state laws, most 3rd party transactions have a cap or limit on the fees that can be charged.

I have a master card..., now when i go to this play and they add .65cents to my bill because my order is under $5, does it violate the agreement also?

-Chris

@Corporate-Shill:
Got anything to back this up?

As a Small Business Manager, these fees really hurt us. We don't sell any items less than 20 dollars, but when you buy something that costs $1200 and swipe your Visa or Mastercard here, we lose something in the area of 15 cents plus 2%. That's 24.15 taken away. When you call in a charge card, or use discover, we lose 6%, when you use AMEX, we lose somewhere in the area of 7.5%. It's hard to bear the weight of the fees after a while, and while we are changing prices so we can discount cash or checks over credit, it takes time for that change to happen here, and we would love to post a separate fee for CC usage.

Most customers have no idea that this charge happens, they figure that their interest rates are what pay their CC companies.

My local Carl's Jr charges 75 cents for using a debit card. I almost didn't notice but I started calculating the total price I ordered with tax and asked why the price seemed a little off. They didn't do this before or I just didn't notice. I ended up just paying the cash I had.

I'd probably be fine with 25 cents charge but 75 cents felt a little high for a debit card transaction fee.

pay in cash? but all those VISA check card commercials? i won't be with it. i will hold up the world. the cool music will stop playing. everybody will look at me.

@RChris173: correct, these idiots are saying they are charging you 1/4 of a cent. anything more would be theft?

@Alipaps: Arco doesn't take credit cards, actually. They only take cash and debit, and there's no problem with charging fees on debit.

Carl's Jr. and Del Taco are like this as well; they'll take credit with no fee, but charge 75 cents on debit. If you have a Visa or Mastercard logo on your debit card, tell them to run it as credit; you'll save the fee.