Add Discover To The List Of Credit Cards That Allow Minimum Purchase Requirements

Yesterday, we told you how Visa and AMEX now allow merchants to require customers up to a $10 minimum for credit card payments and how MasterCard will soon be changing their policy to allow for the same. We’d naively hoped that Discover — who hadn’t yet replied to our query — would be the lone holdout, but… not so much.

Finally heard back from a rep at Discover, who tells Consumerist:

Discover allows merchants to impose a $10 minimum purchase requirement on credit transactions consistent with the Dodd-Frank Act as long as the minimum is applied to all issuers and payment networks.

We’ve also reached out to all the major fast food chains to see if they will allow their franchisees to begin requiring minimums, since an under-$10 credit card transaction is a pretty common thing. As soon as we begin hearing back from them, we’ll let you know.

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  1. Megalomania says:

    They need to stop this nonsense and get rid of the flat fee for small transactions. That’s the problem here, not the small transactions, which still make the credit card companies money, and would make the small businesses money too if not for the flat fee.

    • tbax929 says:

      Vote with your feet. I just won’t shop at places that have minimum purchase requirements for credit cards. I haven’t carried cash regularly for over 10 years, and I don’t intend to start doing it now.

      • Guppy06 says:

        And when (not if) the store with the minimum for credit card purchases is charging lower prices?

        • tbax929 says:

          I’m actually referring to stores where I tend to spend less than $10 – like a coffee shop, Circle K, or a drug store.

          If it’s a place where I’d spend more than the minimum anyway, it wouldn’t matter.

          I’m not going to the ATM every time I want a cup of coffee.

          • jason in boston says:

            Agreed – this is not a big chain problem. Big chains have the power to work with CC companies directly and not with processors. Dunkins will be okay.

            It is the smaller shops that unfortunately will suffer. With that said, I don’t carry cash. If a business doesn’t want to accept my credit card for a soda or coffee and is losing money on that transaction, then they will soon be out of business.

            • Anaxamenes says:

              Or they’ll have better customers who understand that the fees for your tiny transaction completely outweigh any profit they may get from you. There is such a thing as being a bad customer, which means you cost more money to a company than you bring in in revenue.

    • humphrmi says:

      Unfortunately MC and Visa aren’t the only ones charging fees. Most of the fees are charged by intermediaries, called acquirers, who actually provide the POS equipment, and approve and clear the transactions. They are charged a fee by MC and Visa, and in turn charge a (higher) fee to the merchant.

      PIN transactions (pure debit) incur a flat-fee. Signed debit and credit transactions are generally a percentage, although of course acquirers can charge whatever they want, as long as merchants are willing to pay them. And the rates vary between signed debit and credit, although usually only by .1 to .2%.

  2. Delta1 says:

    Discover is fourth when it comes to card acceptance. They wouldn’t hobble their attempts to expand acceptance by refusing merchants minimum purchase requirements.

    • LACubsFan says:

      “We hoped Discover would be the lone holdout”

      Credit card companies don’t have a choice anymore because of the Durbin Amendment, unless they want to be sued by the Justice Dept.

  3. valen says:

    Talk about going back in time here… We were promised a future where almost anything could be securely paid for without carrying cash or a check book. Now, with these new mandatory minimums popping up everywhere, I feel as if we have been thrown back in time to the era of cash and check books. However, in today’s version of the past, many merchants do not accept checks either… Leaving cash as the only viable payment option. I want my rose colored future back.

    • catnapped says:

      Plenty of them don’t want cash either!

    • Anonymously says:

      It’s hard to see credit cards as an actual advancement, so I’m OK with it.

      Bad things about credit cards:
      1) Causing/caused a “spend beyond your means” bubble that is just not sustainable
      2) Added 5+% to the cost of all items
      3) Private financial institutions that get to collect a sales tax on every item sold. It’s bad enough the gobment does it.
      4) It’s just another way that large companies can lower their cost-base versus small companies.

  4. tbax929 says:

    I’m not being snarky; I’m genuinely curious. I’ve never had a Discover card. Is it widely accepted? Is it widely used?

    I’ve never really noticed because almost every place takes Visa & Mastercard (what I use), and I don’t even think I know anyone who uses Discover.

    • HenryES says:

      Discover used to be the only card Costco accepted, so I had one to use there. When they switched to Amex, I closed the Discover card.

      • tbax929 says:

        Really? I did not know that. I’ve always associated them with Amex. To be fair, though, I never lived in an area that had Costco until I moved to AZ a few years ago.

        I thought Discover was a Sears thing. I’m not sure where I got that.

        • KaralynK says:

          Discover *was* originally a sears thing. Introduced by Sears in 1985, then was owned by Morgan Stanley for a while, broke off into its own totally separate company in 2007. They bought the Diner’s Club Network from Citibank in 2008 so they’re trying to work on international acceptance as well.

    • Minneapolis says:

      I LOVE my Discover Card. The strip club down the street won’t take it, though :-/

    • corker says:

      I love discover card. saved me 3500.00 when they charged back a certain car company for a motor that had gone bad. sent them my documents and they reversed the charges. stand by you always

    • tsumeone says:

      I havent found a place that doesn’t take Discover, but plenty won’t take Amex. Amex’ merchant feeds are astronomical, where Discover’s are much more in line with Visa/MC.

      Discover was the only card accepted at Sams Club until recently where they started taking MC as well.

    • Eyebrows McGee (now with double the baby!) says:

      They’re taken pretty much everywhere, more places than AmEx (which is my primary card). My husband has a Discover card he uses only for gas (good rebate or whatever), but pretty much everywhere takes it.

    • Ragman says:

      When I got my Discover card in the 90s, there were enough places that didn’t take it that I had to carry a Visa as well. Now, in my spending world, it’s the hole-in-the-wall donut shop down the street, TXU Power, Atmos Gas, Verizon, and Costco that don’t accept it.

      Verizon is the only one that stopped accepting it, and they did NOT tell customers. Instead, they just let the cards get declined b/c they let their authorization with Novus lapse.

      I found it unusual since it’s the only time I’ve heard of something like it, but my university actually stopped taking Visa. Still took MasterCard & Discover. I think it may have been due to dispute over the convenience fee the school charged for credit cards (~2% on $1000 – $3500 tuition).

      I do come across the occasional website that won’t take it, but most b&m do these days.

    • jamar0303 says:

      in my personal experience, most places in the little corner of the US I’ve been to take Discover.

      That, and their acceptance rate in China blows the others out of the water (this matters to me because I’m studying here). If a shop doesn’t take it at first I ask them to actually try it and it works. That or it turns out they’re cash only (Discover is linked to the local debit/ATM card network so just about everyone takes them). And minimums are practically unheard-of here. I swipe for a bar of ice cream, I swipe for a bottle of water, just about anything at convenience stores that take them (though curiously enough, charges from the local 7-Eleven are categorized as “supermarket”). Though I always wonder- the merchant is apparently only charged the local merchant fee, so where does the difference between the standard Discover fee and the UnionPay fee come from?

  5. Guppy06 says:

    Consider if you will…

    Businesses with large online presences, such as Microsoft, Apple, Sony, and even Facebook now, all offer their own, physical prepaid cards. These businesses pay the expenses of manufacturing these cards, distributing them, getting them on store shelves, and managing their own transaction networks for tracking and securing those cards. And this is in spite of also accepting online credit card payments.

    Would they be doing this if all the costs of offering these prepaid cards weren’t at least comparable, if not less, than the cost of credit card transactions? After all, you can get a “prepaid” Visa or MasterCard nowadays, why don’t these corporations just suggest that as an option instead of dealing with the overhead of distributing these physical cards?

    Credit cards are expensive, and before these minimum charges were allowed, the only legal alternative has been to drive up prices for everybody, regardless of purchase size or payment method. As I alluded to before, I doubt the people who are violently angry now about the possibility of these fees will continue to boycott the stores that implement them when they see the lower prices.

    To the people who worry about having to carry around a checkbook again, remember that the personal check’s heyday was back before ATMs became ubiquitous.

    To the people who complain about the “hassle” of cash transactions, consider that automated cash handling has become cheaper, easier, and more reliable, especially with new features built into new banknotes. About the only room for improvement there is pushing the $1 note into obscurity.

    And to the people lamenting about the possible death of the “chashless society,” you’re forgetting that being cashless necessarily requires private banking networks and their associated overhead. Being cashless has pushed prices artificially high, especially on low-priced necessities like food. It may not have been an important difference before 2008, but that was then and this is now.

    • tbax929 says:

      TL; DR.

      (Actually, I did read it). I didn’t know a reply was allowed to be that long, though.

      The problem I have with having to carry cash is that my lifestyle and habits have changed to the point where it doesn’t make sense to carry cash. My budgeting is done right through my bank account, so it makes sense for me to use plastic – it’s easier to track.

      Also, I don’t bank locally. My bank allows me to withdraw from other banks, but going to an ATM before I go to a convenient store seems, well, inconvenient to me. One of the reasons I stopped carrying cash was because I realized I spent more when I had cash, since it was already out of my bank account. Some people say they spend more with plastic, so YMMV.

      • myCatCracksMeUp says:

        I very seldom carry cash. I use my Amex for almost everything, even the $1.36 for an icy cold Diet Dr. Pepper from the cafeteria at work. There are almost no places here in NOVA that don’t take Amex, but if I run into someplace that doesn’t, usually when I’m traveling, I use my VISA debit card.

        I don’t wanna have to carry cash again.

    • evnmorlo says:

      There is precisely 0.00000000% chance that there will be any price reductions. And I have yet to see a store with automated cash acceptance. Everywhere I look I see people fumbling with bills, miscounting, dropping change, being shortchanged, receiving damned Canadian coinage, accumulating pounds of scrap metal in “change jars”, etc. when they aren’t cleanly and decisively swiping a card.

      • Guppy06 says:

        You must live in rural Alaska if you’ve never seen a self-checkout kiosk in a Walmart or a grocery store. Beyond that, it’s the banknotes, not the coins, that stick together and are harder to mechanically identify, sort and count (which is why I mentioned pushing the $1 coin), machines have been more reliable than people in distinguishing Canadian coins from US coins for at least 20 years (try using Canadian coins to buy a cola from a US vending machine), and anybody that has more than 4 pennies, 1 nickel, 2 dimes and/or 3 quarters has only themselves to blame.

    • Rena says:

      They make prepaid cards because when someone buys you a $50 Visa gift card, you can spend that money anywhere, but when someone buys you a $50 iTunes gift card, you can spend that money nowhere but iTunes.

      Providing ATMs is a poor substitute considering they, too, have ever-increasing usage fees.

      • Guppy06 says:

        First off, you’re assuming that these physical cards are being used primarily as gift media, which isn’t necessarily true. But that too doesn’t require a physical infrastructure: gift-givers are able to simply use a credit card online and have the single-use code emailed to the recipient. Whether the card will be used by the purchaser or given as a gift is unrelated to the financial incentive to pay for the overhead of offering physical cards.

        As for your second point, even if your bank doesn’t offer free ATMs or reimburse you ATM fees, this only becomes an issue if those fees are as high or higher than the overhead you’re paying when using a credit card. If the ATM charges $3 flat fee for a maximum withdrawal of $100, that’s 3%. If the credit card processor charges 25¢ + 5% on a $1 cola, that’s a 30% overhead. Even in this worst-case scenario (ATM fees are still often lower, credit card fees can be much higher), that a savings of 27% for a typical convenience store purchase, or 10% for a $3 dollar-menu meal.

  6. Mike says:

    Why can’t they just charge a 3% fee for transactions under $10 or whatever the fee is? Surely that would be cheaper for consumers than finding the closest ATM which odds are will charge you at least $2 to withdraw $20.

    • tbax929 says:

      My bank (USAA) refunds the ATM fees shortly after I use a foreign ATM (which is every ATM in the US), but I have my own reasons for not wanting to carry cash around, which I listed above.

      That being said, I’d be okay with paying a (small) fee in order to use plastic. I certainly prefer that over a $10 minimum.

  7. Tim says:

    So, since accepting credit card transactions under $10 increased costs for businesses, now that they don’t have to accept them, costs will go down, right?

    Right?

    • EverCynicalTHX says:

      No, as I knew the moment this legislation was brought up – the banks will expect the same profit as always regardless of the ever declining economy the rest of us live with.

      They have adjusted accordingly given the latest credit legislation..

      Those of us with good credit will now be penalized to pick up the tab for those that can’t manage their own finances – Socialism at play and be sure to thank the Dems in Washington.

      Just wait till your new health care provisions arrives…oh the joy of hope and change..

      • Ichabod says:

        Yes the banks like their profits, but the rest of your comment is ignorant bullshit. If you really need to live in a banana republic go fucking move to one.

      • FrugalFreak says:

        They meant the business that you use the cards at. Their high prices were always blamed on merchant fees, overhead, etc.. The user is asking if since now those fees that merchants won’t have to pay, will it lower the cost of the goods.

        IMO, Of course it won’t, It may actually raise prices since the business owner feels an increase in power from this minimum change..

  8. HighontheHill says:

    Been doing this for a long time now. Many of the local mom and pop quick marts, gas stations and coffee shops around here have been bought up by people, well that I don’t recognize, and many of the nice little amenities that kept me coming back, like no credit card minimums have disappeared… So I now purchase my snacks from Costco or some other inexpensive place and make my own coffee, carry a water bottle and so on and I simply refuse to do any trading with them what so ever. I am not alone either I know many folks in my community who have made the same observations and have changed their purchasing habits as well.

    I will go WAY out of my way to support a *local* business and equally as far to avoid giving a dime to someone I don’t recognize…

    I also am a die hard cash user now. Cash has certain benefits, in the coming and the going.

    • NeverLetMeDown says:

      So you won’t spend money with people you don’t recognize, but you’re happy to buy things at Costco. I assume, then, that you know Richard Galanti personally.

  9. Overheal says:

    Who needs to put >$10 on a Line of Credit anyway?

    I assume this doesn’t apply to Debit transactions.

  10. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    So in other words, if I run out of milk, and stop to pick up a gallon on the way home from work, I will have to buy >$10 in merchandise if I have no cash?

    Or face a $2-$3 ATM fee to get cash from the Quickie Mart ATM to avoid buying $10 of stuff?

    Or write a check and give every piece of ID in my wallet to get them to take the check?

    I guess the answer will be to have $10 stashed away in my purse for these situations.

  11. Abradax says:

    I don’t see fast food restaraunts requiring minimums of 10 dollars. 5 perhaps, 10 would kill them.

    • humphrmi says:

      Just wait ’till you have kids. $10 at a fast food restaurant is a dream. I can’t get out of a Wendy’s for less than $25.

      • Abradax says:

        I have kids.

        I also have a job where I run out and get lunch some times. I never spend 10 bucks on lunch, which is one of a fast food restaraunt’s busiest times.

  12. MedicallyNeedy says:

    Shouldn’t “allow” be in quotes?

  13. MedicallyNeedy says:

    I bet they’re all hooked into the new cell phone scan-and-bill technology. Verizon=Visa, Sprint=Am Ex, T-Mobil=Mastercard, Credo=Discover,

  14. MedicallyNeedy says:

    Discover was cool with me. When I became disabled and financially fukd by Ronald Reagan’s pre-existing illness insurance company loophole, Discover took my word and charged off immediately. Visa took 7 years, Am-Ex.- 20+ years later I still get letters and calls.

  15. EverCynicalTHX says:

    Change You Can Believe In….

  16. tgrwillki says:

    How is this not collusion?

    • AnthonyC says:

      The reason they are all changing their agreements at once is not collusion, it’s because they need to comply with new regulations. Congress is allowing merchants to have a minimum for credit cards; so, the credit card companies need to change their contracts accordingly.

  17. wrjohnston91283 says:

    I must be one of the few people who always tried not to use a credit card if a purchase was under $10 in the past. I hate being in line at the cafeteria at work and there’s someone in front of me holding up everyone behind them cause they’re paying for a $3 sandwich with a credit card.

    • wetrat says:

      More like the person using cash is holding up the line looking for the right combination of coins… everywhere I go the transaction is much faster if credit.

      • wrjohnston91283 says:

        That is true, if the person paying cash MAKES the transaction longer than it needs to be, but if your order comes to $4.59, give the cashier a $5 and have her count back change rather digging around in your purse or pocket trying to find pennies.

        • myCatCracksMeUp says:

          But there is still the time for the cashier to count out 41 cents; usually a quarter, a dime, a nickel, and a penny. It’s not that long, but I think paying by cash is always slower than paying by cc. Especially for small amounts since you don’t generally have to sign anything if the amount is small.

          Also – at most stores, you can go ahead and swipe your cc while the cashier is still scanning items. When she’s finished and hits the total button, you sign and click ok, and the receipt prints out. Very fast.

    • Griking says:

      Nope, you’re not the only one. I think it’s silly that people can’t plan ahead and have a $20 in their pocket or pocketbooks for those times when they need to make a small purchase.

      • jamar0303 says:

        Yes-hand over a bill, wait for the cashier to make sure it’s real, then wait as change is handed out to me and make sure it’s real before I leave (if I’m not sure I WILL ask for coins). Or I can swipe my card, wait a couple seconds as the receipt prints out, sign, and be done with it. You see “silly”, I see 0% chance of being burned by counterfeit bills. Once bitten, twice shy.

      • Anaxamenes says:

        My friends have a system for large birthday parties at restaurants. Everyone MUST bring cash. That way it’s really fast to get together enough money to pay the wait staff and there isn’t any problems waiting for the poor wait staff to run 30 credit cards. It’s not hard at all to plan ahead, and it makes everyone’s life so much easier.

    • brianisthegreatest says:

      I don’t think the speed of the transaction is affected by the payment method you’re describing. You must count your bills and coins in the morning to make sure you have the exact amount for your meal. Something tells me that once the clerk opens the register to return change to you, I’m already looking for a seat.

    • myCatCracksMeUp says:

      You think paying by cc is slower than by cash?

      Not anyplace I use my cc, which is everyplace. At the cafeteria at work, the woman swipes my card, pushes one button, and hands me my card back and I’m on my way, and she’s ringing up the next person. The cash drawer doesn’t even open when paying by cc.

      When I’m behind someone paying by cash, I see that the person hand her cash, she punches several keys on the cash register, the cash drawer opens, and she counts out the change, both in bills and coins, and hands them to the person. Several more steps and definitely slower than paying by cc.

      • myCatCracksMeUp says:

        Oh and I forgot to mention that when you pay by cash the cash register always prints out a receipt, which the cashier has to pull out/off of the register and hand to the person, taking another second or two. When paying by cc, unless you request it, which almost no one ever does, there is no receipt printed.

  18. Ichabod says:

    I have a feeling that credit card companies in this cash free world are about to shoot themselves in the dick.

  19. lawnmowerdeth says:

    I like cash, and I hope it comes back. Having a private 3rd party make money just because I want to buy something is idiocy.

  20. brianisthegreatest says:

    I usually try to avoid places that charge if you use a card. I never carry cash, and if some place charges a minimum, I usually go somewhere that doesn’t the next time. Though, I’m not sure how safe I’ll be with this actually being allowed now. I think the problem needs to be dealt with elsewhere in transaction flow, it shouldn’t be effecting the consumer. Consumers shouldn’t be punished for paying with plastic. It is so overly common now and almost everyone has a check card.

    PS.
    I’d like to see an updated visa check card commercial, one where the guy grabs a bag of chips or something, and instead of being speedy with the swipe in the line, the store clerk points at the minimum transaction sign. The guy in line could spend the rest of the commercial looking at items near the register to meet the minimum transaction cost.

    • stanfrombrooklyn says:

      You are choosing – that’s right choosing – to pay in a method that adds expenses to the transaction. Why shouldn’t you be the one to pay for those expenses? You’re getting a benefit above and beyond just completing the transaction.

      The retailer gives you other choices to pay so pay in cash and you’ve got no problem.

      • HannahK says:

        To a lot of people, paying by card is a basic convenience, not a luxury they are willing to pay extra for. At the supermarket do you want them to charge you a fee for a shopping cart, a fee for asking an employee a question, a fee for opening the freezer and using extra electricity, a fee for the AC, a fee for using the restroom, a fee for washing your hands… Technically customers don’t HAVE to do those things, so they are costing the supermarket extra money, but who would shop at a store like that? No business can succeed by breaking down every single tiny expense and charging customers individually for each “benefit above and beyond just completing the transaction.”

  21. FrugalFreak says:

    OK, they all have it. That’s good to know when we knew they would anyways.

  22. stanfrombrooklyn says:

    Oh the torture of having to carry a $10 bill with you…

  23. josephpr says:

    I wonder how people would feel about all of this if instead of merchant fees, the fees would just appear on your credit card bill. If you charge a .99 cent bottle of water at a small store, it would just show on the bill for 1.05 (based whatever rate the merchant’s volume/fee structure set by processor is). That way people who charge an item would pay the actual cost for the service that they apparently cannot live without. Then you don’t need minimums, and there would be more transparent pricing (as well as showing the true cost of “rewards” for using your card).

  24. BuyerOfGoods3 says:

    Couple this with the store owners who ONLY accept plastic and, Does that Equal Extortion?

    Inquiring minds want to know…

  25. damageddude says:

    1) Make customers use cash to pay for small purchases.
    2) Charge those same customers an ATM fee to get their cash out of the bank.
    3) ?????
    4) PROFIT!!!!

  26. fokensheatman says:

    START BRINGING YOUR PENNIES!!!!!
    Get those jars of pennies ready! I know it aint much but just think if everyone started doing it. That would make them constantly make trips to the bank just for petty change. Muahahaha…

    Then again it did say, “The minimum purchase amount must not exceed $10 and does not apply to transactions made with a debit card.”

    So? Do we comply with their demands? Or shall we stick it in their Arse and tell em what we think?

  27. elephantattack says:

    looks like I’m going to carry cash more!