Requiring Minimum Credit Card Purchases is a Violation

Having to purchase a minimum amount at stores might not just be annoying, the merchant could also be in breach of contract with the credit card companies.

Check out page 14 of the Rules for Visa Merchants [pdf].

Might be something to print out and keep in the ‘ol wallet.

UPDATE: The pdf linked to was encrypted so it could only be viewed, not printed, here’s a printable version, thanks to Will!

Stephen of Texas figured the jigger out after he went to an ice cream parlor that wanted a $10 minimum charge. His Butterfinger Vanilla melting letter, after the jump…


    “Mr. Popken,
    I am writing with a great story idea (at least I think it’s great) for the Consumerist. It concerns merchants that require minimum purchases when customers use
    credit cards or debit cards to pay for a purchase. Here are the facts.
    This evening, my wife and I went to a restaurant in austin and had a great supper. We decided to go to Amy’s Ice Cream for some dessert. Amy’s is a chain in Austin; they also
    have stores in San Antonio and Houston. We sent to the store in the 3100 block of S. Congress in South Austin. We have been to this location several times in the past. Amy’s ice cream
    is a more high-end product…..somewhat higher on the food scale than Baskin-Robbins. It is extremely good ice cream worth the premium charged. Tonight, we were greeted by a sign on
    the door and also on the ice cream case stating that there is now a “$10.00 Minimum on Credit Card Purchases Please. Thank you!”
    Typically, the bill for two at Amy’s is about $7-8. I couldn’t see any way to spend more unless we took some home……and we didn’t need to do that. Ice cream is a treat, not something
    I need on a regular basis. We left without buying anything… I refuse to purchase anything from places that enforce a minimum purchase on plastic.
    I checked the MasterCard merchant rules; what they are doing is totally against their merchant agreement with MasterCard. Other businesses do this as well, but this is the first time I have seen
    one with a $10 limit.
    Somehow, the sign “fell” and I picked it up so as to not clutter the floor in the store. I have scanned the sign and it is attached to this e-mail for an interesting graphic. Maybe you could have some fun with
    this subject; I know other are annoyed with this practice and would be interested in hearing your take.”


Edit Your Comment

  1. Danilo says:

    I wonder which would be more fun.

    Direct Approach: “Hello, you rapacious bastards. You’re in violation of your merchant agreement. If you’d like to continue accepting credit cards in the future, I’d advise you process this $0.25 transaction.”

    Indirect Approach: Take a camphone shot of the invariably ugly sign that is posted describing the minimum transaction amount and send it to Visa or MasterCard, along with some info identifying the merchant. Check back in a week to see what happens.

    This kind of crap is rampant nowadays and I’m sure the card companies are pissed by all the lost revenue these contractual breaches cause. If only they had an easy to use form to report dirty merchants.

  2. Chris H says:

    So you want to screw small businesses who can’t make money because of fees…

    Why can’t you just pay with cash so I don’t have to wait and be a victim of your overspending too?

  3. Chris H says:

    Sorry to be so flip. But when you use a credit card for a small purchase, you can eliminate the margin that the business makes on the sale. This cost is transfered on to people like me, who pay cash. It also slows down transactions, because despite what the bankers say, plastic is slower than cash. And not as nearly as sexy. Every time I see you pull out your plastic, I suspect that you can’t afford that $7 ice cream.

    The evil here is not Amy’s ice cream. It’s the monopolistic practices of credit card companies and their fees associated with card acceptance. Already, major retailers like Wal-Mart have brought suits to reduce these fees.

  4. mschlock says:

    Lord save me from being on the same side as Wal-Mart (oops, my knee-jerk is showing) but Chris here is bang-on right — the credit card folks and various hangers-on charge the small business a fee to handle credit card transactions. Actually, it’s more than one fee. First there’s a fee that’s from 1 to (apparently) up to 15 percent of the amount charged, and then there’s an additional fixed fee of “typically $0.25 to $0.50 per transaction” no matter how small the purchase is.

    Google “credit card transaction fees” for more gory details.

    So…if you want to keep Amy’s in business, yeah, your beef is really more with MasterCard et al…

  5. mikelite says:

    chris h, I don’t understand what you mean by “monopolistic practices of credit card companies and their fees associated with card acceptance.” They charge a fee to process the transaction, how exhorbitant is it?

    And really dude, the name ‘wal-mart’ isn’t a positive example of anything, especially around here. no matter what they do, it ain’t doing it for our good, that’s for sure.

  6. The Comedian says:

    Visa/MC used to have an online complaint form, but I can’t find it anymore, and I haven’t used it in about 4 years.

    I reported a local liquor store that had a $25 minimum after discovering it the hard way one night. Upon returning to that packy a few weeks later the sign was gone, so I guess it worked…

  7. DeeJayQueue says:

    For years my boss wouldn’t accept credit cards (and it ended up being his undoing) because of the associated fees. It sucks, but it’s a part of doing business. That’s why it’s been only recently that places like Wendy’s and Arby’s have started taking plastic, and many of those places are governed by the franchisee.

    Yes, we all know we live in a plastic society. I rarely carry cash just because most places take debit cards and I’d rather not have to hunt for my bank’s ATM (because any other ATM will incur a fee) just for $20. However, If I’m going to go have $8 worth of ice cream, unless I’m sure that the place takes cards from the get-go, I normally go grab some cash just in case. (plus i like to tip sometimes… places like Cold Stone Creamery will sing you a song if you tip).

  8. x23 says:

    “It also slows down transactions, because despite what the bankers say, plastic is slower than cash. And not as nearly as sexy. Every time I see you pull out your plastic, I suspect that you can’t afford that $7 ice cream.”

    – and –

    “Why can’t you just pay with cash so I don’t have to wait and be a victim of your overspending too?”

    presumably the ‘minimum purchase’ signs refer to things like Visa Check Cards as well. (i would assume…)

    which have nothing to do with “overspending.”

    they have to do with not walking around like some pompous 12th century moneybags who is scared and frightened the progression of time and advancement of technology. it’s the 21st century. let’s update your payment method Mr. Van Winkle.

    unless you hand them paper and coin *to the penny* it takes you cash-carrying cavemen longer to check out than it does the average pay-station check card user.

    i can’t wait until there is a cash-surcharge on purchases to force you troglodytes to get with the freaking times.

    hurry up gramps! the future train is getting ready to leave without you! TOOT! TOOT! all aboard!

    (actually. yes. i am basically just joshing. i use cash and check card in pretty equal amounts in real life.)

  9. Amy Alkon says:

    I am mindful of the fee to businesses. If you pay for a $1 item with a credit card and it costs them 75 cents to process the transaction…it might be costing them money to sell it to you. More people should be concerned, not just with keeping businesses ethical, but with trying to be conscientious and ethical consumers.

    A way for businesses to make this work in their favor – Starbucks coffee cards. I put $40 on mine and pay with my credit card so I get the airline miles out of my transactions there…without costing the business the fee for a lot of small purchases…which, by the way, are passed on to the consumer in higher prices.

  10. Amy Alkon says:

    Sorry, meant “costs them 25 cents.”

  11. Ben Popken says:

    Four words: Cost of Doing Business.

  12. sanloublues says:

    Ben’s Chili Bowl in DC just put up an ATM instead of taking credit cards. That’s the right way to do it. You can avoid penniless bums who charge everything, help out people who are short on cash, and make an extra buck on a sale.

    Why is helping Mastercard/Visa screw their customers a good thing? The “cost of doing business” is the same excuse they use when they make bankruptcy harder on individual people.

  13. Mary Marsala With Fries says:

    No, I’m sorry, but the “poor businesses” angle doesn’t fly. Businesses have plenty of clout. They could refuse to accept a credit card if they wanted to, en masse, in protest of the fees, and something would probably be done about it. If they want to join the credit card companies in ripping people off, then they should at least play by their own rules. You can’t shake the devil’s hand and cross your fingers, as granny used to say.

    BTW and FYI, many “credit cards” (like mine) are actually debit cards that can be charged as credit cards (which most people do, because many banks are starting to charge a fee to use debit cards…why, I have no idea, other than that banks are assholes). So the “let’s slam individuals for racking up debt” angle doesn’t work either.


  14. Danilo says:

    Gotta agree with Ben. It’s a cost of doing business. If you can’t afford the transaction fees, you can’t afford to play with the big boys. $10 minimum transaction to use a credit card? It’s absurd. If the business doesn’t want to pay the fees, they can cancel their merchant agreements and go cash-only and then accept the consequences of such a move.

    It’s very simple. You can’t just blast that Visa logo on your storefront, advertising to potential customers that they can easily use their plastic to buy goods from you and then, once they are in the store, potentially once they have already waited in line to pay, extort them for money they aren’t willing to pay in exchange for a convenience that is contractually guaranteed. (In the case of this ice cream joint, they were generous enough to place their terms of extortion right on the door, but most others use a tiny post-it scrawled in illegible hand stuck to their registers.)

    No, credit card acceptance isn’t cheap. If you can’t afford it, don’t make it part of your business.

  15. Roadgeek says:

    When I went into Amy’s, my intent was to use a Visa check card issued by my credit union. I don’t carry cash, because if I did I would spend it. I don’t see the need to go and get spending money when Visa is accepted almost everywhere I go anyhow. There is a way to complain online with Mastercard at this link… Needless to say, I complained, as I could just as easily have used a Mastercard to buy the ice cream as a Visa. Visa does not seem to have a way to directly complain; their website suggests contacting the issuing bank. I called
    my credit union, University Federal Credit Union, here in Austin and they were completely clueless and suggested I call Visa. Oh well.

  16. Clare says:

    Ben, I work for a relative’s small business on the weekends and I cannot agree with you on the “it’s the cost of doing business” argument. Perhaps this is naive, but I can’t believe that it has to be that way. I don’t disagree that merchants should be charged for credit card processing services. But why can’t there be a sliding scale for credit card processing fees? Small businesses pay a fraction of a percent of the purchase price, and the Wal-Marts of the world pay a greater percentage of the purchase price.

    I wouldn’t be surprised if that scenario was already standard operating procedure, but Wal-Mart has the clout to negotiate a transaction charge that’s significantly lower than that of my aunt’s little flower shop.

  17. HassGoCubs says:

    My favorite moment involving an illegal minimum: I needed to pick up a dealer button for a poker tournament I was invited to. Stopped by a billiard table store on the way to the tournament, pointed to the button in the case, and said, “I’ll take it.” The price of the button was $9.95. With 6% sales tax, it came to $10.55. Slapped down my debit card.

    The clerk pointed to the “$10 Minimum For Credit Card Purchase” sign. I looked at the guy and said, “You have got to be kidding me.” He said he would be happy to charge me an additional 5 cents to get the pre-tax total to $10.

    I said in a nice, calm voice, “If you don’t accept my card, here’s what I’m going to do. One, I don’t have $10.55 in cash on me, so you’re going to lose the sale. Two, MasterCard prohibits minimum charges, so I’ll be calling them. Three, I’m sure the Better Business Bureau will find this transaction most interesting, so I’ll call them next. Finally, I have at least two friends who are interested in purchasing poker tables in the next three months, and I’ll call them to ensure it’ll be a cold day in hell before they or anyone else I know shops in your store.” At that point, with an exasperated sigh, the guy took my credit card and ran it.

  18. thesilentnight says:

    I like the ATM idea sanloublues has. It shifts the cost to consumers. If they don’t want or have credit cards and they want to use cash, let them. If they don’t have a bank they can always get it from under the mattress where they and their parents have been keeping it since the 1850’s. Certainly their are people who “abuse” credit cards because they buy without the funds to cover it and then just get raped for years on end by the exoribtant fees. However, some of credit card holders actually have money and use the cards for their convenience and rewards, etc.. If you don’t like it, try stuffing cash into the gasoline pump next time you visit. Maybe the guy trying to wash your windows will help you out with that.

  19. thesilentnight says:

    Also, by providing an ATM the business can choose not to accept credit cards forcing those who prefer their use to physically dip into the funds. I’m not sure if there are ATM “taxes” on business who provide space for the regurgitating beasts so maybe the argument is a nullity. Bottom line is people should be held accountable to their agreements. If you agree to maintain a line of credit with your credit card company they you have to pay them back on the terms you agreed to. If you agree to allow consumers to make purchases with credit cards then you have to allow them to do so on the terms you agreed to. If the business doesn’t like the terms then don’t accept credit cards. If the consumer doesn’t want a credit card then pay with cash.

  20. GenXCub says:

    I will chime in just to agree with the sentiments here… there are certain places that you just shouldn’t use credit cards. When I have to stand behind your sorry ass at Subway because you want to pay for a sandwich with a credit card, I get to kick you squarely in the butt. Unless you came crawling in from the desert starving and parched and needed emergency food/soda, please just scrounge up the $3.50.

  21. Chris H says:

    Guys, this is supposed to be a blog about consumerism and consumer rights. The sophistication needs to come up quite a bit. Consumer law and policy is complex, and there’s quite a bit of knee-jerk opinions here.

    For instance, I hate Wal-Mart, but the company isn’t wrong about everything. When they sued to lower the fees, it helped us.

    Second, you shouldn’t use a debit card because you’re not protected by TILA. If you don’t know what TILA and Regulation E are, maybe you should do some more reading before getting involved in debates about plastic versus cash. Basically using a debit card is a risky way of paying with cash.

    Third, Wendy’s and Arby’s don’t take plastic to serve you better. They take it because public benefits are now issued with plastic. It’s the modern way of accepting food stamps.

    Fourth, plastic leaves a trail that is used for data modeling. Since your bank can also own an insurance company (think Citibank/Travelers), maybe you should think twice before whipping out the plastic to buy Wendy’s, liquor, etc. Modern payment brings modern risks that the law does not adequately mitigate.

    Let me make an appeal to you–I’ve been a consumer attorney for years, and the reality is that sometimes consumer and business interests merge. This is one of those cases. The bad actors here are the banks. They are bigger than ever, richer than ever, and charging more fees than ever. It’s just not plastic acceptance fees, it’s that $2 charge every time you get $20 out of the ATM. This is an example where we should support merchants who are paying unreasonable fees just to take a small amount of your money.

  22. thesilentnight says:

    This post wasn’t about plastic vs. cash until the second comment. If using plastic is risky because it allows the provider of the credit line to retain and share personal information or puts the user at risk of identity theft or other criminal consequences, then at the very minimum the user should be informed of the risks the provider may directly expose them to. As for the criminal risks, the user should be responsible for educating themselves. The law has always been at least one step behind and always will be. The law will either do their best to protect us in the meantime or put on a public façade intimating they are doing as much with their own homemade brand of empty sentiment.

    So what public benefits are associated with plastic? Does that mean you can get food stamps on a credit card? Or does it mean that the people who ordinarily use food stamps now use credit cards?

    Bottom line for everyone is that if you don’t want to use plastic then don’t. If you want to use cash and debit cards are risky, then get more money directly from the bank and put it in your wallet.

    To be honest I am personally educated in the business practices of Wal-Mart. I am aware of one perspective that as a company, Wal-Mart may force local and small businesses out of business because they can’t compete with the corporate giant. If their practices are illegal or despicable to this end, then I align my opinion against them as well. I support merchants who want to change how those business with power charge them to do business with their consumers. The point of this post is that a merchant made an agreement to accept credit cards and part of that agreement was to not pass the incidental costs off to consumers by way of mandatory minimum purchase requirements. The business got called out for their violation of the agreement they entered into, and rightfully so, end of story. Like I said before, if you don’t like the terms, don’t agree. If you agree and don’t like the terms, you can’t violate the agreement and then cry foul. As much as I dislike merchants being charged fees for consumers to shop at their establishment, its just bad business to pass the “tax” to consumers knowing you agreed not to in the first place.

  23. thesilentnight says:

    I meant before that I am NOT personally educated in the business practices of Wal-Mart. Also, I disagree the business and consumer interests merge completely here. Take for example the circumstacnes igniting this post. A consumer is being asked to cover the costs of fees the business has agreed to pay. If the consumer wants to pay more to help the business then so be it but obviously Stephen of Texas didn’t see eye-to-eye with Amy’s Ice Cream trying to pass the buck so to speak. Also, the same is true of those in Stephen’s situation: if you don’t like a business’s practices, you always have the option of not shopping there but that doesn’t mean you can’t also hold them accountable for trying, on their own terms, to make you the paying party to their agreement with the credit card company.

  24. Timbojones says:

    What about policies like “There will be a $0.50 processing charge for credit card purchases under $10”?

  25. Roadgeek says:

    If you look at the Visa regulations already posted above it plainly states that there is never to be a “surcharge” associated with the use of the card. I have written a very cordial letter to the owner of the ice cream parlor and will be mailing it tomorrow. What shocks me about this whole affair is the fact that her business enjoys an excellent reputation in Austin and Central Texas; I would have expected this from some rat-trap convenience store but not her company, and I’m letting her know that in the letter.

  26. CatMoran says:

    I don’t see that the shop is breaking any rules. Their sign says “$10 minimum on credit card purchases please“. I’ve seen a lot of signs like that, and it’s rarely stopped me from using my credit card when I really needed to.

    Someone needs to ask ‘Amy’ if this is a demand masked in Texas politeness, or if it’s really just a request (which is no doubt misinterpreted by employees on occasion.)

  27. mftuchman says:

    No – they can’t even suggest it, whether they ask politely or not. If they don’t like it, they don’t have to take the card.

  28. consumerwithrights says:

    With regard to the issue of merchants charging a minimum, I can honestly say that there’s not much leverage afforded to the consumer, since it’s the merchant’s bank that generally enforces the regulation of not charging a minimum/maximum transaction amount, and that information is kept confidential (how wonderful it would be if the consumer could find out who the merchant’s bank is). I did discover, however, one little trick for certain kinds of transactions. It’s incredibly simple too, but it’s also a bit limited in terms of when you can use it. When buying on-the-go food that you have ready access to prior to paying, you simply “start eating the stuff” before whipping out the credit card. Most merchants will cringe at the idea of losing a sale, and would rather bite the bullet and accept the card rather than taking back a half-eaten sandwich, slice of pizza, or whatever.

    In other words, if the merchant arrogantly shoves his unethical policy down the consumer’s throat, the consumer simply shoves the credit card (and the associated fees) down the merchant’s throat.

    It’s at least an interesting way of putting some “teeth” (pardon the pun) into enforcing that a merchant stay in line where he is supposed to be.

  29. Trackback says:

    Were you ever at a store that imposed a minimum $5/$10 charge for using a credit card, and you found yourself with no cash, and like with $3 item in your shopping basket, and therefore were forced to buy something?

  30. consumer_business_owner says:

    I am a merchant and a consumer I charge a fee for ALL electronic transactions under $20.00 dollars, this includes all credit and debit cards. As I understand it the Mastercard contract states you may charge a fee or commission if the fee is imposed on all like transactions regardless of the form of payment. I am not charging a fee for credit cards just for electronic transactions under $20.00 dollars. Some consumers will not go to an ATM because they are charged a fee, but have no problem with a local business having to pay similar fee. The only form of payment I have to accept is cash. I offer the convenience of paying with a credit card so my customers do not have to carry large amounts of cash, not so the Banks can line their pockets with my meager profits.

  31. marnen says:

    First: We can go back and forth all day about the “poor businesses” argument, but the fact is clear — the business signed a contract saying that they would not impose minimum purchase requirements. They *must* honor that contract. If they didn’t want to honor the contract, they shouldn’t have signed it in the first place.

    Second: I have created a place to post names and addresses of merchants who do this. At the moment it’s at [] , but I am in the process of creating a more sophisticated site with a searchable database and a decent report engine. Join the good fight!

  32. CardFellow says:

    Update: Thanks to the Durbin Amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act, the Federal Reserve now has the power to regulate the maximum/minimum purchase amount for credit card purchases. This limit is currently set at $10 or less.

    In other words, it is now acceptable for merchants to impose a minimum of $10 on credit card purchases. However, a minimum purchase amount on debit cards is still a no go.