UPDATE: Requiring Minimum Credit Card Purchases is a Violation

My my, how the rocky road of customer service melts and leaves a sticky trail.

Mike went to Amy’s Ice Cream, the store that Stephen originally complained about for requiring a minimum credit card charge of $10.

We’re not trying to run Amy (pictured, seated far right) out of business, we just think it’s interesting that the merchant credit card processing rules prohibit requiring a minimum purchase amount, yet many stores do it anyway.

If it was important enough to pay lawyers to draft the language into contracts and the ink to print it out, obviously someone, somewhere, thought businesses shouldn’t do this. However, the bad guys aren’t the ice cream parlors, it’s the banks and their usurious fees, which then get passed down to the consumer.

Mike wrote a letter and Amy’s ice cream shoppe wrote back, after the jump…

Mike scribed:


    “Dear Amy,

    I was unhappily disappointed with my last visit because…
    I just went to your location last night. I am 28 years old. I have zero kids, and 1 girlfriend. That means that if my whole family goes to Amy’s and I order what I order and she orders what she orders the total is $8.88. I was greeted with a sign that says we do not accept credit card transactions under $10.00. I do not carry cash, I have not carried cash since about 2001. Cash is dirty, not easily replensiable, and slow. There is no real possibility that I am going to spend 10 dollars ever at an Amy’s at one time. We go to Amy’s often. We will not be going if I have to stop somewhere and get cash first. It is too much of an inconvience to me.

    This new policy doesn’t really fly with me, you are not a small company any longer, you have 10 locations, and I am sure more are coming.

    Also I am not sure if you are aware of your agreement with VISA/MC but in your requirements as a credit card merchant, you are not allowed to require a minimum amount to use a credit card transaction. If they had found out about this restriction, you can have your credit card merchant account taken away.

    All these factors have left me quite upset with this whole thing. I can’t even spend 10 dollars at Amy’s, you are not a small company anymore, and it is against the rules of being a VISA merchant.

    I hope you will reconsider this policy.

    Also your new policy has made internet headlines, at a consumer watch dog website.”

Amy’s reply:

Dear Mike,

First, we are a small mom and pop, we still answer the emails, there isn’t a PR department or marketing wing to answer you complaint. I am sorry that this sigjn upset you. We are trying to keep costs down, so we don’t have to raise prices. Do you realize that your $8.88 transaction can cost up to 10% to process? Do you want us to raise prices to $9.76 for you? The credit card companies charge us a transaction fee, a % of sales fee, a fee if the credit card is not read and has to be hand entered, a fee if we don’t have the billing address zip codes… Are you following me? Tiger Woods is not getting $14 million dollars a year from annual fees. We are facing ever increasing costs for gas, insurance, workers comp etc… None of which you care about, but need to know because I am sure you don’t want us to increase our prices. As for the Visa cards coming to get our account… that would be our lucky day, we spent close to $50,000.00 last year on credit cards. Do our customers spend more because we except credit cards? No, you can only eat so much ice cream. I appreciate you listening to our side, please try to understand. Thanks for the feedback,

Amy and Steve


Edit Your Comment

  1. GenXCub says:

    *sigh* Owner of a company, and she doesn’t get the difference between except and accept… I need a business! :)

  2. rick020200 says:

    She doesn’t seem to get it. Yes, people do buy more ice cream when she accepts credit cards: $8.88 is more than $0. She’s right that consumers don’t really care about all the other costs of doing business. Those are her issues to worry about, and if she has to raise prices to cover the costs, then so be it. Her other alternative is to not accept credit cards at all. Then she’ll see how much more people buy with credit cards.

  3. Nick says:

    If VISA coming along and taking their account away would be their “lucky day”, why do they have it in the first place?

    And why can’t Mike just use a debit card?

  4. Hawkins says:

    I dunno… On the one hand, Amy’s being a jerk: she has a lot of competition, and being nice to your customers is an important differentiating factor.

    And I can’t choke down her pretending that she wants the Visa nazis to shut her down.


    If she’s losing money on the transaction, then why should she do it? If Mike is accomodated, he’ll be happy, and then come back the next day, with his fucking credit card again (he apparently has some sort of Howard Hughes mental disorder about cash and germs), and she’ll lose money again.

    Perhaps there are some customers that it doesn’t pay to make happy.

  5. Plaid Rabbit says:

    My question is, why she doesn’t shop around for another merchant service? If they’re getting almost 10% at the top tier, methinks there’s someone better out there. Visa/MC don’t do most of the fees – the fees are really calculated by who does your merchant accounts.

    Sounds like she’s getting hosed.

  6. etinterrapax says:

    I noticed that right away too. Perhaps she does need a PR department. After all, if she spent more than $50,000 on credit card transactions last year, and those account for 10% of her gross, then she’s taking in a half-mil just on those sales, which has got to be enough to buy the services of an Eglish major to write her customer service emails. I’m not sure, moreover, where she thought that response was heading. We have to impose a minimum to keep from having to raise our prices, but it’d be our lucky day if the credit card company yanked our privileges because they cost us too much? Accepting credit cards is either a benefit to the business or a liability, not both. If it’s not a benefit, they can always go cash-only. If it’s not a liability, then they’re being wankers for violating their agreement and then taking it out on a customer.

    This is not to say, incidentally, that I think a merchant owes the customer credit card transactions. I think it’s kind of tooly to write in and say that you don’t carry cash because it’s filthy and inconvenient and why aren’t they capitulating to your compulsions so you can have $9 in ice cream. I just happen to think it’s toolier for the business to say, “And we’re capitulating to your compulsions! …as long as you spend more than $10 so we can save everyone else 88 cents! Why aren’t you happy yet?”

  7. Plaid Rabbit says:

    Oh, and one other thing – Nick, did you just get here? Why would *anyone* use a debit card? If you don’t know, just page back a few pages…

  8. thesilentnight says:

    I’m with Rick on this one. Amy is ignoring the fact that in her agreement she’s bound not to conduct her business this way. She doesn’t even directly acknowledge this point. Not to mention she justifies passing her costs onto the consumer because, well, consumers can pay for it. Sure business is difficult and maybe Mike is not conscience of the costs to her for conducting business, but you can’t complain about the costs of business, sign an agreement not to require minimum purchases, and then flagrantly doing so to the disadvantage of your customers. If the costs of business are too much then don’t conduct business. In theory every merchant should make some margin of profit otherwise they couldn’t financially operate the business for very long. If the profit margin is too little from the outset then increase the price of services/goods to cover what the merchant thinks is acceptable and what will still bring in enough business to get the profits. If you can’t do that then you shouldn’t be a merchant. Customers aren’t responsible for the financial obligations of merchants otherwise they would be parties to the agreements merchants sign but apparently don’t read or seem to take seriously.

  9. Ben Popken says:

    Debit cards are fine as long as you swipe ’em like credit cards.

  10. Nick says:

    Well, it’s already been pointed out that you can use them without a pin and sign instead, which is, apparrently, less likely to get you defrauded.

    I guess I’m just used to the system we use back in NZ, which _isn’t_ horribly broken.

  11. Plaid Rabbit says:

    I guess that’s what I ment – debit = pin driven (bank system), while swipe & sign = Visa transaction.

    Problem with that is swipe & sign is going to run him into the same fees, regardless of where the money is coming from.

    Oh, Nick – how I wish we had a system as good as the Commonwealth nations have – Canada’s Interac system was wonderful.

  12. Mary Marsala With Fries says:

    thesilentnight is dead right. If I can’t afford something, say a DVD, and I bend or break the rules to get it anyway, by renting it and burning a copy, thus pushing the cost onto the retailer, that’s wrong. But if a business owner can’t afford to accept a credit card, and they “compensate” for that by breaking the rules and pushing the costs onto me, that’s okay?

    No way. Overhead is overhead; you can compensate for the costs of doing business in lots of legitimate ways, like raising prices or streamlining your practices. You cannot compensate by using illegal or unethical measures to get the consumer to cover for you. And because it’s one of my pet peeves, I’ll mention that this also applies to trying to cover your overhead “loss prevention” costs by illegally demanding that all your customers submit to a search of their personal property.

  13. Danilo says:

    That was a pretty shrill and defensive response to a perfectly reasonable complaint. Amy needs to learn from our friend John Pepper of Boloco, who wrote a touching letter in response to a customer upset that roasted veggies were being removed from the restaurant’s menu.


    Let’s compare these two chiefs.

    Amy: “First, we are a small mom and pop, we still answer the emails, there isn’t a PR department or marketing wing to answer you complaint. I am sorry that this sigjn upset you.”

    Amy starts off COMPLETELY on the defensive. Damn.

    John: “First of all, thanks for your note. We always appreciate hearing from customers… even if we’ve done something that doesn’t make them happy, it helps us a great deal.”

    Pepper, on the other hand, takes his “first” to say thank you to his customer. Classy. He acknowledges that he has done something to displease his customer, but wants that customer to know right off the bat that there are no hard feelings and that the feedback is appreciated. This is a good start.

    Amy: “Do you realize that your $8.88 transaction can cost up to 10% to process? Do you want us to raise prices to $9.76 for you? The credit card companies charge us a transaction fee, a % of sales fee, a fee if the credit card is not read and has to be hand entered, a fee if we don’t have the billing address zip codes… Are you following me?”

    Amy then takes a moment to, condescendingly, make excuses for the bad behavior that earned her this letter. John, on the other hand, commiserates with his customer:

    John: “We worried a lot about Roasted Veggies and what the reaction would be. The reason they disappeared in the first place is because so few people actually ordered them, and the amount of prep time and waste (because they’d sit too long and we’d have to throw them out) stopped justifying keeping them on the menu years ago… but because of the few, and outspoken, customers who lived on them, we kept them in place.”

    Like Amy, John provides a pretty thorough explanation of the problem and why the course of action was taken. Unlike Amy, John makes it absolutely clear that he’s very concerned about the customer reaction as this change was implemented. John’s focus of concern as he delivers this brief is not on the consequences to him, but on the consequences to his customer. Not on the inconvenience of managing leftover veggies, but on the inconvenience of disappointing the loyal.

    Amy: “We are facing ever increasing costs for gas, insurance, workers comp etc… None of which you care about, but need to know because I am sure you don’t want us to increase our prices.”

    Cue the violins now. Amy sure has it rough! Guess what, Amy: The customer has to pay for gas, put kids through school, pay a mortgage and plenty of other things, too. There’s no picnic for anyone.

    John: “From a purely business standpoint, it didn’t make any sense to keep the Roasted Veggies. From a customer loyalty standpoint, however, your note (and the others like it) makes me want to get them back on the menu tomorrow! The challenge we always have is balancing the two… you would be amazed at the number of requests we get on a weekly basis from our customers – obviously, we can’t accommodate everyone, but we do listen to everyone, and consider what they say carefully.”

    John, ever the concerned leader, explains his dismay that he has to make a decision that is going to upset any single one of the people who helps he and his employees pay the bills each month. Yeah, it’s not the right fit for his business, but he’s still not happy if his customer isn’t happy. He makes the case from the same business point of view as Amy, but where she sounds whiny he sounds grave, even regretful.

    Amy: “Do our customers spend more because we except credit cards? No, you can only eat so much ice cream. I appreciate you listening to our side, please try to understand.”

    Translation: Take us or leave us. This is how we roll. Your convenience means nothing to us. Thanks for letting me vent to you. Hopefully you’ll still be loyal customers, despite my giving you absolutely no reason to continue our relationship.

    John: “I am sorry I don’t have the answer you are looking for. To try and make up for this, and to give you a few visits on us to possibly find something else that gets you excited, send me the 16 digit code on the back of your Boloco card (you can pick one up if you don’t have one, and send it to me then) and I’ll add some Burrito Bucks on there for you to use. It’s the least we can do, and maybe you’ll find something that works. If not, we will hope that something we do in the future brings you back to our restaurants – we have sincerely appreciated your business and hope we’ll find a way to earn it back soon.”

    John closes by trying his damndest to win back his customer and repair the relationship. This is the way it has to be, and as a business man he knows that, but he’s still not going to feel good about it unless he can get the sparkle back into his guest’s eyes.

    Amazing differences between these two. It’s very instructive to folks in leadership positions within customer-oriented organizations. Always be like John Pepper. Don’t ever be like Amy!

  14. KevinQ says:

    10% of her credit card sales go the bank. How much of her sales are credit card sales? 1/3? If she raises all of her prices by 3.3%, she’ll cover that credit card cost, and only add 13 cents to a $4 sundae. Or, she could raise her higher priced items by 25 cents, and keep her lower priced items the same.


  15. Ben says:

    To me it is simple:

    The business owner sets the price for their product or service. If they feel their costs have risen enough, they need to adjust their prices.

    In essense, what they are saying by setting a minimum purchase is “if you buy enough of X, you have overcome my overhead costs and now I’m into the area of making enough profit that the credit card fees aren’t killing me”

    Instead, they need to figure the fees as part of that overhead and set prices accordingly, or stop taking cards altogether (if enough businesses do that, then Visa will have to lower their fees, at least in theory, to keep business)

    Visa and Mastercard used to have some of the lowest fees in the business and American Express / Diner’s Club had some of the highest. I figure they’ve restructured a bit (it’s been a while since I handled credit cards as part of my job), but back in the day AMEX was getting it from both sides – charging a hefty annual fee to the user, and hefty fees to the merchant.

  16. Joe Hass says:

    To piggy back on Plaid Rabbit’s comment: Costco offers a service that charges 1.67%+$0.20 for a swiped transaction, and that’s just off their home page. Amy needs to do a little rate shopping.

    As for Amy’s shockingly shrill letter: I am still trying to figure out what bug got up her bum when she decided to write that letter. You have 12 stores; you may run a “mom and pop” back end, you may have a Web site that looks like it was put together by a 13-year-old with ADD, but you’re a chain now. The expectations are a little higher.

  17. Hi Exxon,

    I am sorry to hear that you don’t like me to steal gas from your stations. Allow me to explain the economics to you.

    You see, I do not make very much money, therefore I can not afford the rising gas prices to accomodate my hectic schedule of driving. So the only thing that I could do was break the rules and take the gas without paying for it.

    I’m sorry if this hurt your feelings, but do you want me to stop buying (read: stealing) gas from you all together?

    Poor me, wah wah wah,


    P.S. Small business will never win the war by getting uppity with customers. Bees, honey, vinegar.

  18. P.P.S. A great little place called Johnny’s Pizza in my area offers you a free ice cream cone if you pay for your meal with cash. That’s what I’m talking about. Not only a better policy, but it also rubs it in Amy’s face that she’s charging $4.44 for a cup of frozen cream that may (or may not) involve Butterfingers.

  19. ExVee says:

    At this point, I’d go ahead and file the complaint with the credit card companies. Amy has been duly warned that she’s in violation of her merchant agreement, and in response basically told Mike “tough nuts, we’re doing it anyway”, and then told him where he could stick his ice cream cone. Had the response been just a bit more polite, I’d probably be calling for planning ahead when going there and taking a $10 bill.

    But as it is, this requires followup. If the credit card companies are as determined to enforce their rules as they should be, one is all it’ll take. If not, time to round up some friends to make additional complaints over the course of a couple weeks. Somebody will start noticing something.

  20. buck09 says:

    If things are really tight, she should simply impose a nominal charge for the convenience of using a credit/debit card.

    Taco Bell: If I want to use my debit card to pay for my 3.00 of burrito and coke, they charge .75.

    My local record store: They sell at rock bottom prices – less than Best Buy, Wal-Mart. They have two prices on everything: Cash and everything else. Everyone who shops there knows it and it’s cool.

    My local Christian bookstore: When selling concert tickets (not Ticketmaster stuff, but you’re local Lutheran church hosting a band, etc.) they charge $2.00 to use a credit card, because they sell the tickets at their cost, which is their face value…

    Anyways, there are plenty of businesses, small medium and large that charge extra for those who don’t like to carry cash and they’re all doing just fine.

  21. Timbojones says:

    Mike says he goes to Amy’s often. Here’s a solution that will benefit both parties. If Amy’s offered some kind of declining balance card, Mike could pay for, say, 10 ice creams up-front. Pay with the credit card. Mike’s favorite Amy’s location can keep it in a little index card box, or give it to him to carry in his wallet. Every time he orders an ice cream, Amy’s punches a hole in the card. Give a little discount from the full purchase price to promote the cards. Mike gets a discount on his favorite ice cream, Amy’s spends less on credit card transactions and maintains a loyal customer (or gets free money if someone stops coming without filling their card).

  22. billhelm says:

    You can’t tell me that prices at places like Starbucks or McDonalds haven’t gone up because they accept Credit Cards on a 2.50 transaction for a coffee or a big mac… they have. Merchants these days see not taking credit cards at these low dollar amounts as a risk to losing business. Especially since people like me do not always use their debit cards at these establishments – generally only if low on cash.

    If a merchant imposes these kinds of limitations or doesn’t accept credit cards, I simply take my business elsewhere, be it cash or credit.

    It’s not my problem as a consumer that companies get charged merchant fees, just as its not my problem that you have to pay taxes, unemployment insurance, etc. It’s a cost of doing business and it is a lame excuse to pin that back on the customer.

    If I were Mike I’d take my business eslewhere and be done with Amy’s…

  23. P.P.P.S Dale Carnegie would kick Amy in her face.

  24. Shazron says:

    A lot of mom & pop computer stores offer a 3% discount if you pay by cash/debit here in Vancouver. In effect, their “regular” price already takes into account the credit card fees (3%) they would incur. And it doesn’t violate any VISA/MC rules. Might be something to suggest to that ice cream store.

  25. Grady says:

    You know, Amy’s letter may not have been what one would expect from a service-oriented company, especially with the accept/except thing, but Mike’s letter was damn near illiterate. I would have been pre-disposed to answering like Amy did, just because of how whiny, stupid, yet smart-assy he sounds. He whined about how inconvenient it is to carry cash, threatened to not come back, threatened to have her merchant account revoked, then, for a final fuck you, told her that he was pro-actively bad-mouthing her online. It’s no wonder her letter was defensive and sharp. Amy’s letter may have been a lesson in how not to respond to your customers, but Mike’s is a lesson in how to make you as a customer(and the readers of this site, by proxy) look like illiterate fools.

    I’m annoyed as anybody when I just want to get one more dollar beer at my local bar and I have to pay $3.50 in ATM fees to get cash for one more beer, but please, don’t do any more disservice to the cause of the disgruntled consumer by writing such whiny, illiterate drivel. You make us all look bad.

  26. Zach Everson says:

    Amy should realize that some people, like me, are less inclined to frequent a store that doesn’t accept credit cards. And, regardless, she’s still violating a policy that she agreed to.

  27. AcidReign says:

    …..At the risk of ticking some already irate folk off: plan ahead. Your fav local merchant is probably getting butt-screwed over a hot anvil on credit card fees. Carry some cash. It’s not hard. Your bank will give you some when you deposit your check.

    …..Sock Best Buy, Wallie World, CompUSA, and other big boxes with your Platinum Card. They’ve gotten in bed with the big finance boys, let ’em pay for the nasty per-transaction fees! If you’ve got a locally owned business that you value, just pay in cash. Or at worst, write them a check. They’ll really appreciate it. Even if their cashier works for substandard wages and doesn’t care!

    …..And I should add, if you’re buying your lattes on credit (and running a high balance), then you’re part of the problem, and part of Visa’s profit model. Get a coffee maker, and buy grocery store stuff. Or eat peanut butter and chicken thighs for several months. Whatever it takes to get your finances back under control! Sheeesh!

  28. EricaJoy says:

    “…..At the risk of ticking some already irate folk off: plan ahead. Your fav local merchant is probably getting butt-screwed over a hot anvil on credit card fees. Carry some cash. It’s not hard. Your bank will give you some when you deposit your check.”

    Um, who goes to the bank to deposit checks anymore? That’s what direct deposit is for.

    “…..And I should add, if you’re buying your lattes on credit (and running a high balance), then you’re part of the problem, and part of Visa’s profit model. Get a coffee maker, and buy grocery store stuff. Or eat peanut butter and chicken thighs for several months. Whatever it takes to get your finances back under control! Sheeesh!”

    You do realize that using credit cards does not mean your finances aren’t under control, right? These minimum purchases apply to those of us who use debit cards as well (*shock horror* no high balances here), simply because they have the Visa logo on them.

  29. factotum says:

    If Mikey doesn’t like it, he can go somewhere else. Is it Amy’s fault that he thinks cash is too dirty to touch (poor baby)? Irregardless of the VISA policy, it’s not Mike’s place to tell Amy how to run her business. Sending a pithy email to her seems very passive aggressive.

  30. It’s a complex case with no innocent sides… One the one hand, yeah, cash is still legal tender in the US and we haven’t replaced it completely with plastic yet. On the other, I understand the fee structure pretty well for small businesses (I help my parents with some of these issues with their lawn-garden retail business), and shopping around for better transaction fees is definitely a good thing to do!

    Unfortunately, there’s a third, less visible side to the picture, and that’s the megacorps and financial sector that run the economy. The banks get to extract pounds of flesh in merchant fees from small businesses so that they can give huge breaks to the large-volume merchants (i.e., WalMart, McDonalds, Starbucks) such as essentially eliminating the per-transaction fee. (So that charging a $4.00 cup of coffee to the Visa really does only cost Starbucks 2 cents in fees.) So, yeah, I can understand Amy’s situation pretty well.

    Ultimately, though, her response leaves no doubt in my mind that I’d never buy her ice cream, given the opportunity. Her letter was completely unprofessional (and regardless of Mike’s email to her, she as a business owner in the role of good customer service should be held to a higher standard) and bitchy.

    What it boils down to, though, is that Amy is willfully disregarding a policy that she agreed to under the merchant agreement. Her fault, nobody else’s.

  31. Roadgeek says:

    This is the original poster. I expect that I will get the same sort of reply from the letter I wrote to Ms. Amy Miller; if she replies at all. Apparently, she feels that there are no other sources of high-end ice cream in Austin. She is mistaken. Marble Slab has several stores in Austin and their ice cream is delicious. I made a complaint with MasterCard….hopefully some other folks like Mike will as well. Amy doesn’t sound very businesslike or professional in the e-mail she sent to Mike. Too bad for her and her business. I also find it a shame that she so easily flouts business contracts signed in good faith with other businesses. That doesn’t speak well for her sense of ethics.

  32. lgf says:

    $10 min. for ice cream seems very high. I don’t think unless you are with 2 others you would hit it. If you are going to have a minimum at all, at least make it reasonable.

    But, in the end, she agreed to a contract of no minimum purcharse, and she is violating it. Just take cash, then.

  33. ValkRaider says:

    Amy: 1990 called, it wants its business model back.

  34. OkiMike says:

    ValkRaider and Timbojones, right on! I can see we’ve got some smart ones in the bunch!

    What it comes down to is that even if Visa is charging 50% commission, if she is turning even a few pennies profit then it is probably worth it to accept cards. This particular customer has the ability to refer others and continue making purchases as well. All of this means a positive cashflow and future good times for Amy.