AMEX, Visa, MasterCard All Give Thumbs Up To $10 Credit Card Minimums

For years, educated credit card holders have been safe in the knowledge that a merchant could not require them to purchase a minimum amount in order to charge something to their cards. But with the recent passing of the finance bill, the door has been opened to allow such minimums — and the card companies are just fine with that.

Visa is leading the way in this brave new world of minimum charges. Consumerist reader Pete recently noticed that on the card company’s site, it now reads, “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.”

To see if the other card companies were following suit, we checked out the info available on their sites.

In the American Express Merchant Manual [PDF], Section 3.2 says Merchant may not: “impose any restrictions, conditions, disadvantages or fees when the Card is accepted that are not imposed equally on all Other Payment Products, except for ACH funds transfer, cash, and checks.”

To us, this implies that — so long as the merchant requires the same minimums on all the other cards it accepts, AMEX is okay with it too.

We checked with a rep for AMEX who confirmed:

American Express’ policy has been to require parity with other payment products (this is the “equally imposed” section you referenced). In other words, if a merchant chooses to require a minimum for credit card transactions – it must be the same for all credit card products. As you’re probably aware, the Dodd-Frank Act allows for merchants to set $10.00 minimums for credit card transactions but does not allow merchants to differentiate by issuers or payment card networks (i.e. a minimum for a card issued by Bank X on Network Y but not cards issued by Bank A on Network B).

And then we looked at the MasterCard site and had a glimmer of hope when we stumbled upon Rule 5.11.3 in its Merchant Guide [PDF]. It reads:
“A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.”

Alas, our hopes were dashed when we reached MasterCard for comment on the Visa rule change and received the following reply:
“MasterCard will be modifying its rule similarly in the near future.”

We tried to locate rules for the Discover card and were fruitless in our search. Additionally, no one at Discover has responded to our request for comment.

What do you think of the credit card companies allowing merchants to require minimum charges? Do you expect to see more merchants posting notices of $10 minimums?

Comments

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  1. humphrmi says:

    I think a minimum is a good compromise between uncontrolled micro-transactions and charging a fee to take credit cards. As long as they stick with just a minimum, which I suspect they won’t, I’ll be fine.

    • Griking says:

      I’ve always been embarrassed to use a credit card for purchases under $10 anyway.

      • sonneillon says:

        After working at 7/11 for 6 months I have no shame using a credit card for any amount. Stick of gum credit card, a couple mints and some water, credit card. Simply put credit cards are easy transactions for a clerk. swipe and wait. He would prefer it than having to count back 93 cents in change for you paying 2 dollars for a buck 7. It’s just speed and ease. Most clerks don’t even care.

        • wrjohnston91283 says:

          The clerk doesn’t care, but the business owner paying a percentage and per swipe fees probably does care.

          • sonneillon says:

            Luckily in most cases he isn’t the one taking your order and looking at judgmentally. Except perhaps if your a 35 year old doctor shopping at Hollister.

      • Marshmelly says:

        Really? I use a credit card for my $1.50 coffee everyday. I don’t carry cash most of the time.

    • goodfellow_puck says:

      I agree. I’ve only ever seen minimums with small local businesses and I think that supporting them, and keeping them from paying high fees needlessly, is better than complaining about having to carry around a little cash. That’s extremely self-centered of customers to act like that and not consider how hard their local businesses struggle to keep up.

      • Commenter24 says:

        If a business cannot afford to take cards it shouldn’t take then; crying to the govt. is a poor solution.

        • MoreFunThanToast says:

          But I’d rather a place accept cards with a min than not accept any cards at all.

          I usually avoid going to a cash only place because I usually never have cash, or enough of it to cover the tab. I’m also willing to pay a $0.50 fee to use cards in situations where I don’t have cash, that’s infinitely better than trying to find a ATM and get cash.

  2. Eyeheartpie says:

    Crap…this means I’ll have to start carrying around cash again.

    • segfault, registered cat offender says:

      +1. It’s so much easier to carry a small amount of cash and seldom have to replenish it by paying for everything with a credit card.

    • Illusio26 says:

      Or just don’t shop at places with a minimum. That’s what I do.

      • SunnyLea says:

        A $10 minimum… I probably wouldn’t. $5, maybe. My local coffee shop used to ask for $5 min, which I could handle.

      • TasteyCat says:

        Yep. No business from me if you don’t accept credit cards. I carry cash just in case, but I’m not forking it over due to some merchant’s arbitrary policy.

        • Anonymously says:

          You keep sticking it to the little man. Screw you small merchants, hurray for mega-stores!

        • Griking says:

          In all honesty we’re not concerned about losing your $3.50 coffee and a donut purchases that you put on your credit card. Really, we’re not. We’re also not that worried about losing your $50.00 gas purchase since we really don’t make much of a profit selling gas. I understand that you’re only doing what’s best for you but we’re in business to make money too you know.

    • trentblase says:

      I’ll just give the merchant a choice between taking a credit card for the $0.50 gum or breaking my emergency $100 bill.

      • Griking says:

        Sounds like you’ll be spending a little extra in gas when the clerk refuses both.

        • jamar0303 says:

          In all honesty, given that I’d just up and leave. Nothing I can’t get elsewhere.

        • Fletchb says:

          Then report them for refusing US currency.

          • Framling says:

            Legal tender for all debts public and private. Buying gum is a transaction, not a debt. You don’t owe them any money, you just don’t get the gum. Now if your gas station is running some kind of Bill-Me-Later gum operation, then yes, they have to accept whatever legal U.S. currency you provide.

            Not sure what the story is if you pump gas before you pay for it, though.

    • JulesNoctambule says:

      Oh, the humanity!

    • Kodai says:

      what will you do when they stop taking cash?

    • fs2k2isfun says:

      Dollar coins, FTW.

    • Griking says:

      Why is it so difficult to carry cash around in the first place? I can understand if you’re out on the beach in your swim suit but I doubt that that’s the circumstance for most of the people complaining about this? In the beginning of the week I generally take out some cash that I carry in my pocket for minor purchases; this includes my coffee stops, newspapers, and all other small purchases that are generally under $10-$20. When I need to make a larger purchase I still carry my debit card with me. Is it a fear of getting robbed? A fear of losing it some how? A self control issue where you’ll end up spending it on something if you have it?

      What happened to the days of where a credit card was only for when you wanted to make a large purchase and you either didn’t have the cash or didn’t feel comfortable carrying that much cash on you?

      • Bunnies Attack! says:

        For me, Its not necessarily the cash but the pocketful of change that inevitably follows any purchase. Also, as someone who always used credit cards and recently started carrying cash because the store in the office only accepts cash, its a pain to not have enough cash when you need it or break a 20 for a pack of gum and have them hand you a stack of ones in change.

        • UnicornMaster says:

          Agreed. Pockets full of jingling change. Having the right amount to purchase whatever you want. Cash is a huge hassle. What happens when you run out? And then once you get more than a couple bills they do start to take up room in your wallets and pockets.

        • Fletchb says:

          Ditto on the change. You can turn it back in (coinmaster) but they charge you like 8%-9% to convert it back into cash. Just turned in $135.00 worth about 2 weeks ago from all the change I had lying around the house. Between the hassle of having to go to the bank and dealing with change, I now use debit for almost everything.

  3. sharkzfanz says:

    Its a slippery slope.. This is not the answer… Bubble…….

    • Gulliver says:

      Slippery slope to what

      • usa_gatekeeper says:

        Slippery slope to even higher minimums.

      • Unclaoshi says:

        I have a friend that works for tech support for a company that deals with credit processing when you use a card and you would be surprised how many often a transaction accidentally loops. He has told me about multiple times that someones transaction ends up being in the thousands of dollars. Sure they get their money back and any fee’s once it gets sorted out but still if someone used their debit card and they loose all of the money in their bank account for a week or two while it gets sorted out it can be a hassle. I mean sure it isnt that common but it happens enough

  4. phrekyos says:

    It’s not like they ever enforced the rules about minimums, checking IDs, or anything else anyway. I, however, will continue to not shop anywhere that pulls this crap.

    • Dover says:

      I frustrates me that these things aren’t enforced. Why bother making rules if you’re just going to let everyone break them?

    • sonneillon says:

      Agreed. If I walk into a convenience store and they have a minimum for credit card use I will walk right back out. I encourage everyone to do the same. If companies go out of business for this crap then they won’t do it.

      • craptastico says:

        if you’re using a credit card to buy less than 5 or 10 dollars worth of stuff, you’re doing them a favor by walking out. i used to work at a small store and we lost money small transactions like that after paying the CC company their fee

        • catastrophegirl chooses not to fly says:

          then everyone would get what they want out of it?

        • RadarOReally has got the Post-Vacation Blues says:

          I used to work at a bank, and if that’s the case then that business was run very poorly. On a $1 transaction, say the item cost the store 40 cents. 20 cents for a card fee is a pretty high percentage, but they’ve still made 40 cents they wouldn’t have made. Yes, they have to pay the employees, lights, etc. But they’re paying that whether or not this $1 transaction takes place.

          If a store is losing money on this, they’re not pricing right. If they’re looking at the books and saying “good god, look how much more I could make if I didn’t have to pay Visa”, then they’re poor businessmen/women and are missing the big picture, which is that Visa brought you that business in a lot of cases. And 40-cent transactions add up. And customers that like your business keep coming back.

          • myCatCracksMeUp says:

            +1 for the excellent explanation.

          • BBBB says:

            “On a $1 transaction, say the item cost the store 40 cents. 20 cents for a card fee is a pretty high percentage, but they’ve still made 40 cents they wouldn’t have made.”

            This is an oversimplification of retail business. While the store would like to have the $1 items cost the store 40 cents, that is not always the case. A smaller store cannot buy in enormous quantities like the chain stores but on many items the smaller store needs to be competitive. That item might cost the store 60 to 75 cents reducing the profit.

            Then include “shrinkage” and that profit might go away or even turn into a loss. The theft, damage, and other loss of stock for $1 items is fairly high even in the best run store. (There are some other costs such as stocking, inventory, ordering and shipping, but they are usually a very small part of the item cost if the store is well managed.)

            Then you have the 20 cent (plus percentage) transaction fee – when I had a business with credit cards, the fee was much more until you were in business a while and started to get the competing offers from other credit card processors. Most new businesses get stuck with a bad rate for the first 6 months to a year until they show the credit card company some competing offers. [This is an unexpected start-up cost for a business unless one has a prior relationship with card processors.]

        • sonneillon says:

          Depends on the store. At 7/11 the average transaction when I worked there was $2.11 and credit cards made up 3/4s of that stores purchases. And there are other considerations associated with people who won’t shop in the stores because of it. It’s not the occasional person who is the problem. It is several people not shopping where it harms the company. Even if they take a small loss on the transactions if they stop shopping it raises costs across all transactions.

      • SunnyLea says:

        I would, but not just on principle. Because I never carry cash and it is no longer “convenient” if I have to buy $10 worth of crap.

      • Gulliver says:

        I will do exactly the opposite. I see no problems on a business making a transaction cover its expenses. People like you would be the first to whine about higher prices, which is the only way a business could make this happen. You and people like you are why this country is filled with Wal Marts buying from China. You believe your “right” to do what you want supercedes the businesses right to survive. Congratulations. I hope you enjoy only shopping at big supercenters that can get away with smaller transaction and swipe fees.

        • sonneillon says:

          It is not about rights, it is simply about competition. I don’t think the business has any right to survive or take my money than any other organization. If all businesses adopt this policy I’ll suck it up and carry cash. If only a few do then I won’t shop there and they can adapt or die. I will shop at the places that give me the best value at the lowest price with the least hassle. These days that puts most of my shopping with Amazon and my clothes shopping at Penny’s.

    • Darrone says:

      But most major corporations had policies about it. Sure, you’re local quick-e-mart may have a minimum, but now 7/11, mcdonalds, subway, etc are going to enforce a minimum.

      • frank64 says:

        McDonald’s won’t, they don’t get the higher swipe fees that the smaller merchants pay. They see an advantage in accepting them.

      • wooster11 says:

        Yes, I highly doubt major corporations will enforce a minimum. The fees they pay are well worth keeping the customer to them.

    • Spinfusor says:

      I’ve reported stores a few times to MasterCard (for charging minimums and for charging more for credit card transactions). When I went back to the stores a week or two later, they stopped.

  5. milkcake says:

    They impose minimum anyway. Let’s just make that $10 so that nobody makes minimum of $15, because that’s just annoying.

    • ophmarketing says:

      There’s a pizza place near my office that has a $20 minimum. That means any time I really want to order a small pizza ($11), I’m out of luck. This is probably good for my health, but it still pisses me off.

  6. womynist says:

    This sucks. I wonder if Dunkin Donuts will follow suit with the minimums. If they do, then I (and many other New Englanders) won’t be able to buy a $2 coffee with a card anymore.

    Dammit I hate carrying cash!

    • Rachacha says:

      Could you purchase a gift card load it with $50 pay for it with a CC and then use it to pay for your daily $2 transactions? Not the best solution, but for someone like me who rarely carries cash, this might be the comprimise.

      • cosmic.charlie says:

        What the hell kind of compromise is that?!

        • Hoss says:

          I guess you don’t go to Dunkin Donuts? I use the DD card every time. I don’t usually carry cash and would feel awkward using a credit card for coffee. The DD card makes for a very quick transaction and can be easily reloaded using any credit card either on-line or at the counter.

          • Fafaflunkie Plays His World's Smallest Violin For You says:

            Tim Hortons does the same thing. You can either pay in cash, their Timmys cards, or RFID-enabled MasterCards (not Visa/AMEX though.) No debit cards or credit cards they have to swipe, as that takes time, and people can get very impatient at a Timmys, trust me. Timmy cards can be reloaded online as well. That’s good.

      • donkeydonkeypublicbathroom says:

        then if you have to carry around a bunch of gift cards for 10 different estamblishments and if you lose one/all of them, you’ll out of luck!

    • Hooray4Zoidberg says:

      There will be no change at Dunkin. They didn’t start taking credit cards because they were forced too by imposed minimums. They did it because they want every possible chance of making the sale even if you have no cash on you. I’m sure they’ already factored in service charges when they initially decided to accept cards.

      Besides at $2.77 for a large ice coffee which probably costs them 25 cents to make, I think they’re doing ok. This is mostly for mom and pop stores that are making only a few cents profit per item on something like a pack of gum. If you buy a 25 cent pack of gum from them with a credit card they might actually lose money on the sale.

    • jason in boston says:

      What people don’t really understand is that Dunkins, Walmart, Target, whatever big company doesn’t pay the transaction fee that smaller businesses pay. They have huge volume so the CC companies give them a discount.

      • NYGuy1976 says:

        Dunkin Donuts, unlike Starbucks and the other companies you mentioned, is a franchise. I believe with any franchise, the owner of the location can choose any provider for merchant services but it will be treated like a small business.

        • jason in boston says:

          I don’t know if you are 100% correct on this…but you could be. I thought that Dunkins “mothership” handled all POS functions.

    • Me - now with more humidity says:

      You could take turns buying coffee for the next four people 8-)

  7. DariusC says:

    Yes, I expect that small merchants will post 10 dollar minimums, but the larger market/gas stations will probably keep the rules the same, seeing as how people who travel usually stop to grab a sandwich and a drink (under 10 dollars). I see also that businesses who set these limits will get considerably less business than those who do not set these limits.

    Also, what about counterfeit bills? What about people having less cash on them nowadays (I never carry any cash, less liability)? Meh, I think the whole thing is a bad idea.

    • Guppy06 says:

      The only real question is if any business lost by imposing a minimum charge is offset by the savings on card processing fees. I’m sure it’s something accountants and such will be scratching their head at for a long time.

      Merchants check the anti-counterfeiting measures in currency about as reliably as they check the anti-counterfeiting measures in credit and debit cards, namely not at all. And a merchant that accepts a counterfeit card is in exactly the same situation as one that accepts counterfeit currency: it’s their loss, nobody else’s. Card issuers have absolutely no obligation to honor counterfeit cards, and a fiduciary obligation not to.

      • jamar0303 says:

        The danger in counterfeit money is greater. On top of the possibility of losing 100% of the transaction’s value, you also risk losing more in real change given out for any large-ish counterfeit.

      • anyanka323 says:

        You’d be surprised at the number of places that have no protocol for checking for counterfeit bills. At the last grocery job, I was given a dumb look when I asked if there was a counterfeit pen to check large bills. Then again, this is also the place that takes any check without entering ID for new accounts or people who haven’t written a check in a while. They got their fair share of bad checks.

        Counterfeit bills and bad checks cost businesses more than credit card fees. I would like to see businesses have a minimum amount for writing checks, the same as the minimum for using a credit card.

  8. RayanneGraff says:

    Oh, this is just horse shit. I wouldn’t even HAVE a stupid Visa if my employer didn’t force everyone to do direct deposit(and I refuse to use one of those stupid paycards that charges me $1.50 for every ATM withdrawal), so I can’t even cancel it in outrage. What’s the fscking point of even having a CC it if I still have to carry cash?@

    • balthisar says:

      You can’t get money out of your direct deposit account for free instead of using your Visa?

      • RayanneGraff says:

        I can, but I don’t really feel like stopping at the ATM after my 90 minute drive home from work. Businesses should just take cards for everything.

        • Coalpepper says:

          Use it as a debit card, as the article notes, minimums don’t apply to debit transactions, this just means more problems with people struggling to remember their PINs.

        • Anonymously says:

          No offense, but if I had to commute 90 minutes for work I’d literally kill myself.

    • beoba says:

      Some banks refund ATM fees at competitor banks. Take a look at Schwab, Ally, or USAA*

      *Their insurance is limited to military, but their banking/investment is open to everyone.

  9. jshier says:

    My only card is my BoA check card, which can be used as a credit or debit card. If I use it as debit though, BoA’s keep the change program doesn’t apply, so I’m out free money.

    Don’t take credit cards? Guess I’m not buying from you then.

    • Destron says:

      What kind of check card do you use that keep the change does not work on? I use mine as debit all the time and it works on mine.

      • jshier says:

        I’ll have to try it. I thought I remembered reading something on BoA’s site when I first signed up for the account that only transactions processed as credit would do Keep the Change.

    • flyingwolf says:

      Just so you know the keep the change thing does not give you free money. It just rounds up to the nearest dollar and puts that extra amount in a saving account for you.
      Still your money being spent.

    • 4Real says:

      I have BOA too and yes they do offer the Keep the change for the debit card purchases I use mine only for debit and I get the change thing every month..

  10. Anonymously says:

    If AMEX, Visa, and MasterCard would have made it economical for retailers to accept “micro” payments, this wouldn’t have happened.

    • frank64 says:

      I hope this encourages them to do it.

    • SunnyLea says:

      Correct!

    • RadarOReally has got the Post-Vacation Blues says:

      If business would learn that services aren’t free, then they would welcome the business micro transactions bring. Trust me, they’re not losing money on anything over a dollar.

      • Anonymously says:

        Let’s assume 10 cent transaction fee plus 2% fee (probably low estimates for a small business)

        100 purchases @ 1$ each: Pay $12 in fees, keep $88.
        10 purchases @ $10 each: Pay $3 in fees, keep $97.

        Under this scenario, if you have a minimum of $10 you get to keep up to an additional 9% of your credit card transactions.

  11. PanCake BuTT says:

    Double crap, I was just thinking about this over the last couple of days. I’m so sick and tired of minimum charge amounts, or even worse, those who tack on a separate fees all together. I was charged .75 just for the transaction just the other day at a diner.

    I guess this will mean carrying around cash more ofter. It’s the business loss.

    • Moosehawk says:

      I believe it’s still against the merchant agreement to charge extra for using a card. You should contact your card issuer and the diner to try to get your money back.

    • cheezfri says:

      From Visa’s website (to merchants): “Always treat Visa transactions like any other transaction; that is, you may not impose any surcharge on a Visa transaction.”
      From Mastercard’s website: “A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction.”

      • mcgyver210 says:

        All a Merchant has to do is reverse the discount & give a discount for Cash or Check which doesn’t break any rules.

  12. ShruggingGalt says:

    We’re not going to institute a floor on credit card purchases. But because there is no longer any gray area, we will shortly begin cash discounts.

    • lihtox says:

      Cash discounts are fine so long as they are aren’t advertised in such a way as to be confused for the actual price. I avoid gas stations which list their “cash” price first, followed by the “credit” price underneath it in the same or smaller sized font: of course we have all been trained to look for the lowest price as being the price of “regular” gas. It’s particularly irritating at gas stations, because it’s so much more of a nuisance to go inside and pay cash, and even more so if you have small children in the car that you don’t want to leave alone.

  13. RaysPizza says:

    Merchants should take this to the next level and have cash vs credit pricing everywhere… how about a 5% surcharge on all credit card transactions…

    • VeiledThreats says:

      That would be illegal in the state of California.

      • ToastedWoobie says:

        Speaking with some California retailers, it seems the new finance act will allow tiering of fees for various credit cards. Retailers help pay for all those perks credit cards give, and some card companies are crazier than others when it comes to the fees they charge the retailers. A minimum charge or tiering fees may help some of those small businesses be able to survive.

    • Hoss says:

      No, no, no — not good business. You do a 5% discount for cash, that’s the ticket!

  14. devwar says:

    Works for me. Less impulse buys when I have to spend at least $10. Thanks, Credit Card Companies!

    • nbs2 says:

      ?

      It wasn’t their idea. When you’ve been regulated, you’ve been regulated.

    • evnmorlo says:

      Yeah, I’m glad I won’t be buying milk or a loaf of bread on impulse any more. Finally I will break the bad habit of eating thanks to Congress.

  15. MerlynNY says:

    I like how the article states this doesn’t apply to debit cards, yet if you whip out a debit card at any of the establishments that impose the 10 dollar minimum, they still refuse your card. I stop shopping at any place that does this. Simple as that. If they can turn away my business in this economy, then clearly they don’t need it.

    • The Marionette says:

      Exactly. There’s 2 gas stations nearby that are across the street from each other and one is a speedway, they don’t require a minimum amount where as the one across the street does. I went to the other just to buy a soda and he said I needed to spend at least $5 for my debit card so I just went on over to speedway and got the same soda without needing to spend $5. Their loss.

      • Anonymously says:

        Actually, the other store probably lost money on the soda, so it was their gain.

        • terroristfistjab says:

          People really overestimate how much the processing fees are for small transactions. Most merchants batch transactions daily/hourly (depending upon volume). The merchant processors my clients have used primarily make money by charging a fixed fee per batch (not transaction), a percentage of batched sales (varies by company but half of 1% to 2% is what I’ve seen, and a monthly statement fee (fixed, generally $10-25).

          So no, the store doesn’t really lose money on those sales.

          • Gulliver says:

            That is a lie told by those who sell credit card processing. If you try reading a statement of what each card took from your account each time it is like IRS tax code. If it is a rewards card the fee t is more. Most small businesses are charged a per swipe fee period. Batching has nothing to do with the fees charged. I am sure some of your clients actually believe that .IF that were the case, why wouldn’t every business just batch once per day, pay the 1/2% you claim? It is another reason many merchants do not accept Amex and Discover. McDonald’s etc can guarantee a certain number of transactions, but a mom anbd pop are the ones who pay the higher fees to make that happen.
            Glad you are on the side of chains and not local business though. It really explains why Wal Mart is the evil empire and will run every small business out of business as soon as they can

        • chancyrendezvous says:

          But if I know that I can get a soda at Gas Station A without hassle, I’m probably likely to return to Gas Station A to fill up my car even if prices at Gas Station B are the same. The gas station may take a loss on the micro transaction, but there’s something to be said for customer preference/habits.

    • HannahK says:

      I completely agree. I prefer credit cards (which come with rewards points, theft protection, and Mint) to carrying cash (which means trips to the bank, increased risk, and having to save paper receipts). I might be forced to change my habits somehow, but it will be to travel further to a store that treats credit cards and cash equally. I won’t patronize a store that tries pass their cost of doing business on to me like it’s some kind of punishment.

  16. Reverend Mike says:

    As a very small retail business owner I have chosen to forgo setting a minimum for my customer’s comfort. I also chose to take AMEX and Discover even though their fees are so much higher than VISA and MC.

    Even though I can now require a minimum, I won’t. It’s one of the things that keep people coming back to my store when others in my market alienate them.

  17. joe says:

    what about charging $1 or $2 service fee, like a friend of mine who owns a convenience store does? most of his business is cigarettes or single bottles of beer, and his margins are low so he insists people take a $1 service charge to use their credit card on a small purchase, or he refuses the sale.

  18. Megalomania says:

    Surely the better solution would be to just not charge the ridiculous flat transaction rate for small transactions?

    The merchants stop putting restrictions on minimum amounts, which drives away business, and the credit card companies get to charge that percentage on more transactions, increasing their take. But then again, that would help consumers, so I guess credit card companies can’t stomach it.

  19. Guppy06 says:

    I’m still waiting for the card companies to actually start enforcing the “No ID-checking security theater” policy. Most of the time nowadays it’s little more than a ploy to gather contact information for advertising campaigns.

    And then there’s all the online merchants who insist on getting my phone number, when nobody can get their phone number with much less than a court order, but that’s another cynical rant.

  20. Nigerian prince looking for business partner says:

    This could make billable work expenses a pain. My company rarely issues petty cash and we’re supposed to put virtually everything on our company CC. On a large field project, I make a great deal of

  21. Rectilinear Propagation says:

    If they didn’t mind it then why’d they have the rule in the first place? As others have said, it’s not like they ever enforced it?

    Did they just want for there to be some legislation to blame the change on? “Oh sorry, but the GOVERNMENT says we have to allow this.”

  22. ubermex says:

    Minimums are allowed, but fees for paying with credit are illegal in a lot of states. They can get around them by making it a “kiosk fee” occasionally, but that hasn’t been very common.

  23. Griking says:

    Here’s a suggestion for all vendors not accepting credit card charges under $10.

    Have an ATM machine installed for your customers and when they all bitch that there’s a service fee for using it the vendor can respond with “welcome to what I’ve been dealing with the last decade”

    • terroristfistjab says:

      But it really isn’t the same, you have to know that. The $3 fee charged by most ATMs in this area is 15% of the $20 I need to pay for that item (since most ATMs don’t offer in smaller amounts). Merchants are paying a small fixed amount (usually less than $20) per BATCH, plus a small fee per dollar amount. All of this “woe is me” for businesses is annoying.

    • HannahK says:

      And then say goodbye to your customers… Why should I care what it’s costing the vendor? I don’t like dealing in cash and if they are going to show a preference for customers that do, then I’ll take the hint and stop being their customer. And then their business will probably fail and I’ll laugh at them.

      • Gulliver says:

        Businesses are happy to lose unprofitable customers. The US car companies in an effort to have “extra business” through the years popped up the sales figures with unprofitable fleet cars. When they realized this was unprofitable business they stopped. The same can be said on a smaller scale. So go ahead. As a small business owner, I do not want your business. If you cost me money you are not worth it to me. And before you give the ” other days I come back and spend 1000’s, is just bullshit.
        Thanks for supporting the Wal Marting of the country. Hope you are happy with monopolies of big corporations

      • FranktasticVoyage says:

        You understand that “costs to the vendor” are passed down to the consumer, right?

        If the vendor is getting screwed, they’re going to pass it through to the consumer either by higher prices, lesser service or reduced product.

        • HannahK says:

          Yes, I understand that, but personally I wouldn’t shop at a store that installed an ATM and forced credit card users to pay an extra fee. I think that’s as ridiculous as a restaurant charging a fee for extra napkins. I also expect to have soap and toilet paper in the restrooms without paying them extra for it. Sure, it costs them money, but it’s a basic convenience that they need to provide if they want me as a customer.

    • Bativac says:

      Yeah, people want something but they don’t want to pay anything for it – in this case, the convenience of using a credit card. I don’t like minimum requirements but it should be the prerogative of the business to decide whether they want to charge a minimum. If there’s a minimum purchase requirement and I don’t want to spend that much I just don’t buy anything. Problem solved.

      (Incidentally in St Augustine, FL there’s a pizza joint that does not take credit or debit cards, and they have an ATM right by the door – at $2.50 a pop!)

      • Commenter24 says:

        The business shouldn’t have signed a contract with the CC companies promising not to impose a minimum. The business was free to reject the contract in the first place.

        • cheezfri says:

          Yes the merchant is free to not sign an agreement with their bank, but it isn’t really the bank’s requirement, it is all the actual credit card companies like Visa and Mastercard. If you want to accept credit cards at all, you must accept those terms.

  24. IThinkThereforeIAm says:

    I guess it’s done, so not much can be done about it, but:
    .. what if the CC companies would get rid of the flat-rate service fee, and just impose a percentage of the amount (with a cap). In this way the merchant would not loose his/her margin, and could accept micro-transactions?

    • jshier says:

      Yeah. Something like no more than 1%, capped at $1.

    • Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

      Now, stop making sense, IThinkThereforeIAm.

    • ReverendTed says:

      The card companies (Visa, Mastercard, Discover) are percentages-based, I think.
      It’s the credit card processors (the middlemen) that decide what the merchant pays per transaction.
      Our processor, for instance, has no per-transaction flat fee – it’s purely percentages, so a minimum transaction isn’t an issue for me.

  25. kc2idf says:

    I would like to know which definition of debit card is in play here. Retailers and banks use the term for two different things.

    To a retailer, it means a card used with a PIN.

    To a bank, it means a card that draws from a deposit account (usually a checking account) instead of from a line of credit.

    What does it mean to Visa/Amex/MC and the law in this context?

    • cheezfri says:

      You are referring to PIN debit vs Signature debit? I think they have the same rates (respective to each other, but not necessarily with respect to consumer credit, corporate cards, etc.)

    • j_rose says:

      Unless you ask the retailer if they accept debit, and they say Yes, then you go to check out and they have no pinpad, and insist they can accept your debit card as a credit card. Uhm, I asked if you take debit for a reason, not credit. You would not believe how many people think ALL debit cards can magically be run as credit.

  26. LACubsFan says:

    Thanks Democrats for passing the Durbin amendment. By the end of the year ALL credit cards will be changing their merchant to allow FEES, To set their own Minimum and Maximum rules, and the govt will now be setting the fees merchants get charged per transaction. The solution… Carry more cash on you… Don’t think so. Get ready for ATM FEES at all banks to make up for the money they are gonna lose from these rules. This is HORRIBLE for consumers.

    • beoba says:

      Yes, now the card companies are being forced to use up front fees/APRs rather than continuing their race to the bottom with ‘gotcha’ fees.

    • UnicornMaster says:

      So you prefer a system where all the fees are hidden and taking advantage of the people with the least means to keep them in debt and struggling to make ends meet? If you believe in the free market then you should realize that people will flock to the companies who don’t use this legislation to take advantage of their consumers.

      • LACubsFan says:

        @ beoba and unicorn..

        What the fuck are you boys on?? I was talking specifically about the Durbin amendment that allows merchants to set min/max transactions, give discounts for using cash, and charge fees to CONSUMERS.

  27. EverCynicalTHX says:

    CHANGE you can believe in…

  28. hewhoroams says:

    I hope this doesn’t catch on at fast food restaurants, gas stations, and convenience stores.

    • terroristfistjab says:

      You’re being sarcastic, right? Seeing as how those are the places that have been setting arbitrary minimums on their own before the bill passed.

  29. Heresy_Fnord says:

    Companies have been charging minimums for years. It doesn’t really matter what Visa or Mastercard says, none of their rules that protect consumers have ever been enforced. Plenty of businesses all over town have had minimums. $3, $5, etc. Now they’re just officially allowing it. Good job!

  30. vitajex says:

    Bullshit! They have been fine with this for YEARS! It’s not a new thing. I understand that their merchant agreements stipulated that the merchant could not institute a minimum purchase amount, but that was enforced about as strictly as anti-PED rules in the WWE.

  31. scurvycapn says:

    If it is less than $10, I’ll use my debit card. If it is more than $10, I’ll use my credit card that I pay off every single month so that I can get my cash back. Problem solved.

  32. vitajex says:

    P.S. If anybody thinks that that burnout manning the register at your local Stop-n-Shop knows the difference between a credit card and a debit card, then send me your email address so I can send you some information about an exciting, new way to make money by knitting handmade pager cozies at home.

  33. 4Real says:

    I think it is a good Idea because why do you need to use a CC to make a $5 purchase if you dont have $5 in cash or on a debit card you dont need it that bad plus if you dont pay the bill you are charges interest so a $5 charge can become $25

    • evnmorlo says:

      How does the lack of cash have any relation to need? And while you might have yourself to blame if you end up paying interest, losing or having your cash stolen is cruel and unavoidable.

    • sqlrob says:

      a) I don’t like carrying much cash
      b) Given the leaks of CC info, I sure as heck am not using my debit card anywhere.

  34. coren says:

    And how do you deal with a merchant that insists on a minimum for a visa debit (they say you can’t) or any minimum over the limit the card companies just imposed, or other violations of this (like charging a fee to use your card)

  35. smbizowner says:

    that clarification would be nice.

    when I accept a debit card for a purchase, most customers request we processes LIKE A CREDIT card. which means a set transaction fee plus a % of the sale. where as a debit card transaction (where you enter your pin) it is a flat transaction no added % fees. the cost to a business to take a PIN debit is way less $.

    Most banks want debit card transactions to be processed like credit cards as to capture more $$ from every purchase.

    and as for transaction fees, % of sale fees etc. The larger the business the better the rate. So a smaller mom and pop shop is most likely paying a % or 2 or 3 more than some big chain company.

    • evnmorlo says:

      But the benefits of any legislation will almost entirely go to the giant retailers. As for PIN transactions–one of my checking accounts charges me a fee on them, one will stop paying me interest: do not want!

      • Gulliver says:

        So basically you stay with a bank that will screw the merchant or you? Glad your bank is so important to you

  36. FrugalFreak says:

    That’s fine, they just lose my money! You will NOT have your cake and eat it too Financial/Businesses if I have a say about it. I will quit carrying around cash, and if I can not make a purchase for $8.99, well too bad.

  37. loquaciousmusic says:

    On a related note, I’m a huge fan of not having to sign for purchases under $25.

  38. nycdesigner says:

    I like to pay everything, and I mean everything, with my Discover or AMEX so I can gets me to the next cashback level. Since I’m already paying inflated prices in the bodegas that try to impose minimums for card use, I don’t give a $#*! what fees they have to pay. Plus I pay off my cards every month, so I’m a total deadbeat to them also.

    I have, on many occasions, successfully fought the minimums by mentioning the merchant agreements to the managers.

    I also purposely have some stores (like my MET Foods) ring things up as credit on my debit card (since they don’t take Discover or AMEX) because I must shop there, but hate the management for a number of reasons.

  39. balthisar says:

    I guess I’ll be spending a lot less. No more impulse purchases of mineral water and king-sized Snickers.

  40. Donathius says:

    This might actually save me money. I never carry cash, and I waste a lot of money on sub-$10 transactions. If I can’t use my card I won’t buy anything. My wife will be so happy!

  41. karlmarx says:

    I think this is a bad idea. I use my Bank of America Debit Card for everything. I refuse to carry more than $20 in cash. I don’t like to carry cash. I will probably start writing checks if this becomes an issue.

    • wrjohnston91283 says:

      So you’d rather carry around a checkbook than a couple of $20s? What happens if you lose the checkbook and someone finds it, and empties your account?

  42. JulesNoctambule says:

    If only there were something other than a credit or debit card people could carry around that could be exchanged for goods and services! Maybe one day.

    • Fafaflunkie Plays His World's Smallest Violin For You says:

      Oh, you mean.. like.. CASH? What a novel idea! %]

      • JakiChan says:

        And maybe if that thing was SECURE and if it was STOLEN you wouldn’t just lost money…you know, like what cash ISN’T.

        The people who proudly say they use cash for everything aren’t that smart. It just means they can’t properly manage a credit card.

  43. nacoran says:

    The problem is the fee for the merchant to let you use the card is so high that it eats up all the profits for the merchant. We’ve created a false market by subsidizing credit card use on all purchases. It should be the merchant and the consumer vs. the credit card company. That’s the way the market should logically align, but the credit card companies managed to flip the market to their advantage by making it inconvenient for the consumer for the merchant to stand up against the credit card companies. If the consumer had to pay the fee, or split it with the merchant then there would be downward pressure on the fee. Cash would compete with credit cards on equal footing.

  44. Fafaflunkie Plays His World's Smallest Violin For You says:

    I would agree to something akin to “Minimum purchase $10 to use a credit card, else we’ll have to charge a 75¢ transaction fee” in order to cover the fee the CC company will charge them to handle the transaction. That would surely get rid of people who’ll use a credit card to buy a pack of gum. Is it that unsavory to carry a few dollars in cash? Or do you think the $1 pack of gum is going to get you 100 bonus Air Miles on that reward card?

  45. crazydavythe1st says:

    Oh please. The gloom and doom talk is completely unwarranted. Smaller businesses will require minimum purchases, which they had been illicitly doing anyway. Larger businesses will keep things as is – cash handling has a lot of hidden expenses.

    They should have actually fixed the problem – the high fees that banks charge small businesses. Does McDonalds really care when you put a $1 cheeseburger on your credit card? of course not. For a small business, a customer putting $1 on a card could amount to giving an item away once fees are factored in.

  46. shadowsystem says:

    huh… of course they all say thumbs up… it means they make more money….

  47. Bog says:

    I have no problem with this don’t’cha know…. The the merchant should at all times be able to add to the receipt an itemized line outlining any fee charged by the used use of the credit card company. As long as the policy is posted up front and the charge is clearly added to the receipt it should be allowed, period.

    As it is if you want a “better” price – you can ask the merchant for larger purchases if they are willing to give an additional discount for cash, check or even certified check. Works quite often. I have seen some stores over the last few decades offer “Cash Discounts” for not using a credit card. But perhaps they could and should post a sign – Credit card purchases will have a 3% fee because they charge a percentage on every transaction.

    Frankly. I would like it so that the fee is not charged to the merchant. The credit card holder gets the charge on their bill for every purchase.

  48. meg99 says:

    So those billboards in the DC area right now about charging a big mac with your Visa card a little bit late.

  49. wetrat says:

    Every time I see stories this, I shake my head because everyone acts like cash control is free (i.e., the only costs suffered with processing payment are those associated with credit cards).

    If the cash handling is being done properly, each cashier needs to be properly counted out by a manager, large bills need to be skimmed periodically from the register and put into a safe to prevent loss due to robberies, and someone has to take that money at the end of the day to make the deposit in the bank. Larger businesses may even need to pay an armored car service! Even then you would be amazed at the discrepancies that can arise between how much cash you are supposed to have (based on sales) and how much you actually have.

    If the cash handling is not being done properly… well let’s just say that the cashier is probably pocketing a way larger % than whatever fees Visa is charging these days.

    … not to mention that ANY amount of cash is susceptible to hold ups while the CC transactions are safely banked away.

  50. cheezfri says:

    If your debit card is refused (or any other violations, such as requiring ID), complain in the following fashion:

    For Mastercard, go to http://www.mastercard.com/us/personal/en/contactus/merchantviolations.html

    For Visa, write to Visa Inc. P.O. Box 8999 San Francisco, CA 94128-8999 or call 1-800-VISA-911, press zero twice, and ask to file an “incident report” regarding a merchant violation.

  51. dreamcatcher2 says:

    I think this is actually a good thing. The credit card system where minimum charges aren’t allowed passes enormous costs on to the retailer, who passes it on to us in the form of higher prices. The government allowing retailers to charge minimum prices should result in lower prices.

    • JakiChan says:

      But it won’t. They won’t lower their prices one bit. I was talking to a 7-11 owner about this during their “petition drive”. They’ll make more profits. If the credit card company starts making less money they’ll pass that on to you as well. The only person this doesn’t benefit is us.

  52. Carlee says:

    I usually use my credit card when I go out (occasionally) for lunch. Sometimes this means using my card for a $3 purchase. The places I’ve been to don’t have limits for credit card orders, although they charge 50 cents for debit cards. That’s one thing I don’t understand – don’t banks charge merchants for their credit card transactions, and not for the debit card ones?

    Anyway, I prefer using my credit card over cash. I don’t have much cash (ever, since I don’t use it) and I hate carrying change. Although I did once pay a dollar with bunch of coins including like 20 pennies. I understand that the merchants are charged 3% (for Visa and Mastercard, that is) but it’s a convenience issue. Either that or I could not patronize your store (which maybe you don’t care about, since I’m not spending boatloads of money there anyway). We can load cash onto our work ID cards and use them as debit cards either on campus or at some merchants in the neighborhood. That’s pretty convenient too and I thought maybe that was a better alternative than using my credit card (with the 3% transaction fee that the merchants have to pay) – but I read the vendor terms & conditions and it seems that merchants have to pay a 4% transaction fee! Why would any of them want to accept our ID cards then?!

  53. Yo Howdy says:

    Thanks Obama! Your financial reforms have raised the interest rates on all my credit cards, required me to make monthly minimum payments on no interest promotional plans, and now lets merchants have minimum transaction amounts for credit cards!
    And the benefits I gained were . . . well, I always pay my bills on time, so late fees and that sort of stuff doesn’t apply to me. . . guess I can’t think of any benefit.
    Thanks Obama!

  54. BlueEyesTM says:

    I suspect that MOST merchants won’t understand that the minimum DOESN’T APPLY TO DEBIT CARDS, and refuse to accept any debit card transaction for less than $10.00. Talk about a confusing requirement.

    • mcgyver210 says:

      Actually if I remember correct a few years back I received a notice & read in the news that Merchants can’t be required the accept a Debit card at all. I could be wrong on this though but it was a big deal.

      Also Debit cards also cost fees but can be less if done with a pin although not all merchants can run debits with a pin. This is why Retail Stores make it harder to use your debit card as a credit card because it cost less to run debit with pin.

  55. jumpycore says:

    wait, merchants aren’t allowed to require minimums?

    thats funny. my local pub The Griffin, requires a $20 minimum for each transaction.

  56. mcgyver210 says:

    Merchants can & always have been aloud to charge a Min just not aloud to single out Credit Cards for a Min. Now we can though. Also get Ready for more changes Merchants have come together & demanded change for the Out of Control Fees imposed by the Major 4 Credit card Monopoly.

    I just received notice recently the the Unqualified Fee is once again being raised which coincidentally most of our transaction are Unqualified at the Highest rate. We are in a much better position since we do have a $225.00 Min charge for any transaction but the fees go up & we pass them on to the consumer somehow because that is how it works. I keep cards in our business as a convenience for some clients but most pay by check.

    Until you have been a Merchant with all the very biased rules none of you really know what the cost of your cards are. As for merchants having a choice this just isn’t true because consumers pushed for cards & the Big 4 pushed merchants with all the fees to cover rewards etc.

    Those of you that don’t like change may not be buying anything before it is over. A long over due change is coming to Merchant Processing.

  57. xamarshahx says:

    they should just lower the fees on transactions under 10 bucks.

  58. Mike says:

    Why have a minimum? Why not charge me the 3% or whatever the cost is for purchases under $10? It would be cheaper that whatever crazy ATM fee I would have to pay to take out cash and the vendors could recover their costs.

    • ReverendTed says:

      Pretty sure the merchant agreement prohibits charging to recoup credit card processing fees.
      For that matter, I’m actually curious about the permissability of “cash discounts.”

  59. TheCorporateGeek Says Common Sense Is The Key says:

    So what about the small donut shops and convenience stores who currently accept cards but don’t have a pin pad device? I notice that this doesn’t apply when using a debit card…

  60. keepntabs says:

    What would be better is that banks and credit card companies greatly reduce the fees they charge for transactions under $10. This way the merchant can afford to accept credit cards on small purchases, and not have to require minimum purchase amounts or charge fees for credit cards.

  61. sipsake says:

    Nice to know you really don’t care for my business. Doesn’t hurt me any since there are usually half a dozen other businesses in the area that might like to see me every day.

  62. dilbert69 says:

    It’s fine with me. I can use my debit card or cash if I want to engage in a smaller transaction. Besides, $10 is chump change these days.

  63. ReverendTed says:

    From a merchant’s perspective, I think minimums only matter if you’re charged a per-transaction fee by the processor.
    Our processor is purely percentages. I’d prefer not to deal with cash if I can avoid it.

  64. megs says:

    I own a small retail shop and if someone charges something under 10 bucks, my profit margin goes down to 5%. So yeah, I have a sign. I’m terribly sorry if you think you’re above carrying around filthy money.