This McDonald's Charges 25¢ To Use A Credit Or Debit Card, Violates Merchant Agreement

Reader Brandon sent us this picture of a McDonald’s violating its merchant agreement by charging a fee for using a credit or debit card. The text reads, “FEE ASSOCIATED WITH CREDIT/DEBIT CARD OF 25¢ WILL BE APPLIED TO CARD TOTAL.”

As we’ve previously suggested, Brandon reported the violation to Mastercard and Visa, as well as to McDonald’s headquarters. To reiterate: most credit card companies’ merchant agreements forbid merchants from requiring a minimum charge to pay with a credit card, asking for ID when you pay with a credit card, or adding a surcharge for paying with a credit card (merchants are usually allowed to give a discount for paying cash, however, if it’s clearly labeled as such), and we encourage readers to report violations directly to the credit card company using the info here.


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  1. Invalid_User_Name says:

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

  2. mindshadow says:

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

  3. speedwell (propagandist and secular snarkist) says:

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

  4. Brain.wav says:

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

  5. mebaman says:

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

    Don’t know about other states . . .

  6. skatastrophe says:

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

  7. Cogito Ergo Bibo says:

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

  8. RChris173 says:

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

  9. tartis says:

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

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

  10. kalikidtx says:

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

  11. rmz says:

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

  12. B says:

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

  13. Angryrider says:

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

  14. Murdermonkey says:

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

  15. AdmiralNelson says:

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

  16. post_break says:

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

  17. rmz says:

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

  18. JoeTan says:

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

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

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

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

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

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

  19. XopherMV says:

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

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

  20. dtmoore says:

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

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

  21. induscreed says:

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

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

  22. Applekid ┬──┬ ノ( ゜-゜ノ) says:

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

  23. CRNewsom says:

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

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

  24. zarex42 says:

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

  25. hellinmyeyes says:


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

  26. mdoublej says:

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

  27. xxldave says:

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

  28. pegr says:

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

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

  29. A.W.E.S.O.M.-O says:

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

    Sorry if this is a repost…

  30. snoop-blog says:

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

  31. mdoublej says:


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

  32. james says:

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

  33. drftjgoj says:

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

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

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

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

  34. Triterion says:

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

  35. nedzeppelin says:

    actually, according to the merchant agreement at

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

  36. Crabby Cakes says:

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

  37. nedzeppelin says:

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

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

  38. Wormfather is Wormfather says:


  39. nedzeppelin says:

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

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

  40. Panamapeter says:

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

  41. dewrock says:


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

  42. It is NOT illegal.




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

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

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

  43. chr1831 says:

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


  44. Pylon83 says:

    Got anything to back this up?

  45. MustyBuckets says:

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

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

  46. gewdtimes says:

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

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

  47. mikelotus says:

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

  48. mikelotus says:

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

  49. HeartBurnKid says:

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

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

  50. DeadWriter says:

    Most business calculate what the merchant processors fees are per transaction into their general pricing scheme. It really is part of doing business, as is the power, water etc…

    As far as people justifying the charge- the CC companies are make record profits. I wish somebody would create a credit cooperative on the scale of Visa and Mastercard- at least then we could have a hope of being charged fairly.

  51. Concerned_Citizen says:

    @mebaman: I find it interesting florida passed a law forbiding businesses from passing credit card fees onto the customer, but didn’t do anything to stop credit card companies from charging the outrageous fees. For small businesses I wouldn’t be angry over an extra fee. Because it is not right for them to pay it. But McDonald’s is huge. I highly doubt a company that size is paying that much in transaction fees. They probably get a fixed monthly price or pay nothing by being their own credit card processor.

  52. Finally found what I have been looking for.

    Here are ehe MERCHANT’s directions for VIAS acceptance.


    On the site are specific directions for checking ID’s:


    “Match the signature on the sales receipt to the signature on the card”

    “If the signatures don’t match ask for additional ID. If the card or receipt and ID signatures don’t match, make a Cone 10 authorization call.”

    Now, before anybody goes bonkers, think about this for a moment….. Visa directs the merchant to review ID’s when “signatures don’t match”. Since signature matching is pretty darn subjective, it pretty much leaves open the question of ID’s. One merchant could choose to check EVERY ID under the pretense the signatures don’t match while another merchant could choose to check NO ID’s under the pretense that the signatures looked close enough, and both merchants would be correct.

    One the Consumer site, VISA gets all puffy chested about protecting the consumer’s privacy. On the merchant’s site VISA in a nice little security handout says something completely different and shifts the burden of security back unto the linelevel employee accepting the cards on behalf of their employer.

    This whole issue just illustrates VISA’s inability to write policies that are clear and precise to protect both consumer and merchant.

    Wanna bet who I think is the worse company in America?

  53. @Pylon83:


    Read nedzeppelin’s prior post at 05:05 PM.

  54. doctor_cos wants you to remain calm says:

    @Corporate-Shill: IN FLORIDA IT IS ILLEGAL. “florida statute 501.0117” > []

  55. asherchang2 says:

    That’s not as bad as this one merchant at Anime Central which I bought a paddle from this past May. Hen Da Ne Int was selling these Uke/Seme paddles and told anyone who asked that they’re 35 each. I was short on cash but they had a card reader so when they charged my card, they told me it was going to be 37 with tax. (99% of merchants and artists include tax collected in their prices).

    And when I signed the receipt, it turned out they charged $42 to my card because of “credit card fees”. I was pretty angry right then cuz I knew this violates the merchant agreement, but I really needed to use the paddle later that day…

  56. hahnchen says:

    Businesses should have the right to charge for credit card transactions. If you want convenience, you should pay for it.

    Credit companies are making an absolute killing, shafting both the customer in interest payments and businesses with transaction costs.

  57. forgottenpassword says:

    ANY business that starts doing this….is one business I refuse to do business with. ESPECIALLY when it comes to gas stations.

  58. dh86sj says:

    So the way I see it, if the surcharge gets tacked on, it increases the total dollar amount of the transaction. So instead of collecting 2% of $5.00, Visa/Amex/whoever collects 2% of $5.25. Not a huge difference, but why would they actually enforce this provision of the merchant agreement when they stand to gain?

    The language probably wound up in there back in the day before credit cards had completely permeated the consumer landscape. Credit cards are no longer perceived as a luxury,rarity, or fad, but as a essential component of our daily lives. One only needs to look at Visa’s IPO for the proof.

  59. @doctor_cos:

    You are right. Problem is the merchant from whom are purchasing the food items is not charging you a surcharge, it is a convenience fee for accessing the 3rd party’s terminal and CC system.

    BTW I am not defending the practice. I think it sux. I am just explaining why and how these charges happen.

  60. @asherchang2:

    Charge Back for the excess fees. That is an illegal surcharge.

  61. mac-phisto says:

    file a complaint with your card company – they have a form “notification of customer complaint” that they can file with visa.

    also, the fee would warrant a chargeback as it violates visa operating guidelines. i would suggest informing your card company that you wish to pursue a chargeback in this instance.

    finally, the merchant is really, really, really stupid for trying to do this. they are facing stiff penalties from visa (upwards of $1000/transaction), the possibility of chargebacks for any/all reported transactions (in addition to the fees for chargebacks that visa charges) & ultimately losing their ability to process transactions thru card networks.

    i would also considering contacting your state department of consumer protection (this violates laws in many states), as well as mcdonald’s corporate (i’m sure this violates a section of their franchise agreement).

    stick it to ’em!

  62. blong81 says:

    Oh no they di’n’t!

  63. MayorBee says:

    @asherchang2: I’d have said “Whoops, I charged it to the wrong card, can you refund it and charge it to this one?” They get hit with more fees, then file a chargeback with the card issuer.

  64. mxjohnson says:

    Visa and MasterCard’s merchant agreements are clear, standard, and well known. If a merchant thinks the costs of accepting credit cards outweigh the benefits, they should not accept credit cards. They should not pick and choose which policies they’re willing to follow. Nor should Visa or MasterCard look the other way when merchants violate their agreement.

    While it can cost quite a bit to accept credit cards, it also costs money to accept checks. And cash, too. It’s the cost of doing business.

    Different businesses pay different amounts per transaction. If they take a credit card order over the internet, for example, they’ll pay more than if they were a brick and mortar store physically swiping the card themselves and getting your signature.

    But it’s simplistic to say it’s the merchant that pays the credit card company. They raise prices a little bit to offset the cost of accepting credit cards. If a business makes half of its sales to cash customers, and half to credit card users, the price increase per transaction will probably reflect about half of the cost per credit card transaction. Yes, the cash customer is subsidizing the credit card user a little bit. That’s why you can often get cheaper gas at stations that don’t take credit cards.

    If you have a credit card, you’re paying for at least some portion of the transaction cost when you buy something, not to mention any interest or fees that are part of your statement. And one of the things you’re paying for is the convenience of a credit card with standard merchant agreements.

    Here in Southern California, many places ask for photo ID. I comply, tell them I shouldn’t have to, file a complaint, and so far Visa and MasterCard have done a fine job telling them to stop asking for ID. However, I have yet to see a merchant charging a surcharge for a credit card transaction. My guess is it’s the norm in some places, but not in others.

    It’s shouldn’t be a regional thing. You shouldn’t have to quiz the McDonald’s employee about their policies regarding credit card transactions. And it leaves the door open for fraud — a merchant could charge $1 but not post any signs. At a fast food restaurant where you don’t even sign a slip, you might not even notice the discrepancy on a receipt. If you were to complain to Visa or MasterCard after the fact, how would they investigate? Unless they enforce No Surcharges policy, they’re in for a headache.

    Finally, @Corporate-Shill: I have had a sales clerk compare my signatures and then as for my ID. That’s fine, since my signature is a bit of a scrawl, and it was an expensive purchase. That’s happened once. Far, far more often, I’m not even given the option of signing until I have shown my ID.

  65. azntg says:

    @zarex42: That sounds like a fair concept to me.

    However, that working out in an ideal fashion is a pipe dream and a naive one at that.

    Merchants CAN and most probably WILL double dip. Both small businesses and larger businesses. As soon as it becomes socially acceptable AND legal across the country, you can bet they will factor into the cost of credit card processing into the general price AND charge a fee for credit card processing. Nobody’s the wiser.

    Cash paying customers = LOSE
    Credit card paying customers = LOSE

    @Corporate-Shill: Your statement is probably correct. Perhaps not for the legality of that, which would inevitably vary from state to state.

    I can tell you that in New York State, it is illegal:

    N.Y. Gen. Bus. Law § 518

    “No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means.

    Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.”

    So, not only would you be violating the merchant agreement, you would also be committing a misdemeanor as well. And if you meet the wrong customer, that seemingly small and insignificant misdemeanor may cost you big time.

  66. SayAhh says:

    @JoeTan: Here’s a solution that gas stations use: they can charge LESS for cash, but not MORE for credit. All they have to do is to raise 2% on EVERYTHING on the menu, then state that I’ll be cheaper if they paid in cash. Everyone will still pay, but now can’t complain. Well, except for the food quality…

  67. SOhp101 says:

    It’s not an issue of it being illegal but them violating their merchant agreements. I simply vote with my dollars and purchase my item(s) elsewhere–if any company is stingy enough to make you pay a fee up front, who knows where else they excessively cut costs.

    And for those who say file a chargeback, it’s not that simple to dispute a charge with most credit card companies, amex being the typical exception. The others usually require you to request it via mail, so that’ll cost you 42 cents right there.

    Honestly we (as consumers) would all be better if companies did not accept credit at all, but they do, so I will take advantage of the service. (By the way, these companies can give a ‘discount’ for people paying with cash–an easy loophole to these surcharges).

  68. @azntg:

    The NY statue does not apply because the fee is to access the 3rd’s CC processing terminal.

    BTW, it was in NY that I complained and got shot down by the AG because the merchant was not charging the fee.

  69. thewriteguy says:

    I think a large part of the problem is that many of these stores, especially small ones, don’t understand the concept of math. You either have to raise the prices of everything by a certain percentage to make up for the loss incurred from accepting credit cards — or just don’t use credit cards at all. You small business owners cannot have it both ways.

    Personally, I have started to quit patronizing businesses that charge a fee for using a credit card. I don’t mind if a minimum purchase amount is required (like $5 or $10, but over that is unreasonable).

    Either factor in the cost of accepting credit cards or don’t accept them.

  70. Pylon83 says:

    I meant can you provide any proof that this is what’s happening?

  71. I had this happen to me at a local store once. No sign was posted that there was going to be a $1.25 fee, so when the extra amount came to my bill, I did a charge back.

    Credit union contacted Visa, I imagine Visa did something to the merchant.. they stopped the charge next time I went back (I asked first, however).

  72. @Corporate-Shill:

    No one said it’s illegal.

    It’s against MC and Visa policies and the merchant agreement.

  73. TorrentFreak says:

    So what happens when they get busted?

    ::::SLAP ON THE WRIST:::::

    What happens when I get called out for violating a MC aggreement.

    ::::FINANCIAL RUIN:::::

  74. Thorny says:

    It’s worse when some of these places don’t accept bills higher than a $20. Pretty soon we won’t be able to pay with anything.

  75. Lucky225 says:


    It is, however, illegal in Texas, and such action can be reported to the attorney general:

    Charging Extra For Credit Card Use


    In Texas, a business can not penalize you for paying with a credit card. Businesses that add a surcharge to those who pay by credit card might be violating provisions of the Texas Finance Code. However, businesses can discount the regular retail price of an item for consumers who pay cash. If you believe a business is charging extra for credit card purchases, please a file a consumer complaint with our office.”

    Something I’d like to point out about the picture, regardless of weather or not it is against merchant agreement and/or applicable laws — the fee is “.25cents”
    I wonder if you could just complain about them charging a quarter instead of a quarter of a cent ;) — Verizon can’t do math anyone?

  76. Silversmok3 says:

    Lets check our perspectives here:

    Visa/MC do not care about enforcing their merchant agreements. If they did this article would not exist.Has anyone ever heard of a large business(like McDonalds) getting their credit card acceptance revoked b/c of this?I haven’t

    Second:Business owners are being screwed.Visa raises their ‘take’,which directly removes money from the business. So the business can either lose $ .15 on every customer with a CC or debit sale, or they can raise the menu prices and stick it to those paying cash too.

    If an extra .25 on your Fry order is a financial burden, then you got bigger problems then an ‘illegal’ surcharge.

    After all paying in cash is the smartest way to buy(setting aside air miles/perks/etc), as you spend less.

  77. Lucky225 says:


    Actually Wal*Mart HAS had their credit card acceptance revoked several times for asking for ID, those stores no longer ask for ID, others still do however. — The Wal*Mart close to me recently had their DEBIT acceptance account shut off for 2 weeks for some violation.

    Secondly, this is not about 25 cents, it’s about the principal, today 25 cents, next week a dollar, next month 2 dollars. You have to bite these things in the ass from the beginning to make sure it doesn’t continue in the future. If a business doesn’t agree with a merchant agreement, they shouldn’t sign it. Signing the agreement constitutes acceptance of the terms, if they can’t comply with those terms, they shouldn’t be accepting credit cards.

  78. parad0x360 says:

    Ive never been told I couldnt use my card or had to pay a fee. I bought something at a Pharmacy once that was $0.75 with my debit card. Sure I felt like an ass but I still left with the item.

  79. sinrtb says:

    “There will be a $ .75 surcharge added to every purchase made on premises. Paying in cash will provide a $.75 Instant rebate.”

    That I believe conforms to the merchant agreement.

  80. BillsBurg says:


    What do the CC companies do extra for a processing a $100 sale vs. a $1 sale that would warrant higher fees for them for higher sales?

  81. ghettoimp says:

    I was one class shy of a math major, so maybe I’m missing something obvious. But I don’t see any difference between charging a fee for paying with credit and giving a discount for paying with cash.

    For instance, there’s a store called “Spec’s” that I sometimes shop at here in Austin, which gives me a “5% discount for paying with cash or a debit card.” But just doing the math, this is exactly the same as if they had lowered all their prices to the cash level, then said, “we’ll charge you a 5.26% premium if you want to pay with a credit card.” Admittedly the fixed price of 25 cents complicates things a little bit, but it can still be cast as a discount for using cash just by factoring in the number of items being purchased into the equation for the discount.

    In any event, the credit card company charges the restaurant a fee for processing transactions. The restaurant has to make up this fee by either (1) charging credit card users more, or (2) charging everyone more. Even as an avid credit card user, I can see that option #1 is much more fair.

  82. Snarkysnake says:

    Whats really happening here is the attempt to shift the burden of too high costs of the whole Visa/Mastercard system from the merchants (who benefit from it’s acceptance) to the customer (who benefits from the convenience). This is a test of wills, a probing attack to determine if the customer will accept a fee for not having to carry cash or make an ATM withdrawal. The merchants are not stupid. They see that bank customers will pay $1 or $ 2 to get a twenty out of an ATM,(Banks have effectively made customers pay for the update to their technology) and they are simply trying to see what the market for convenience will bear.If enough people give in and “just pay the damn fee” then look for this to become common.(BTW ,thats when the fee will go from outrageous to insane because Visa/MC will soon see that its them and…Nobody else competing.

  83. lauy says:

    As far as Visa goes:

    Merchants may access a surcharge on PINNED transactions.

    They may NOT on pinless, or credit transactions (this includes credit and check cards).

    Merchants also are forbidden to set a minimum purchase amount for purchases when using a Visa credit or check card.

    Report violations like this to your financial institution. They will usually refund you and report the unethical action (called a compliance violation) to Visa…HOWEVER, don’t demand a temporary or provisional credit from your financial institution. These matters are NOT covered by Reg E. You will get refunded, eventually. You may have to provide your receipt, though, in order to get refunded…

  84. says:

    @JoeTan: i think mcdonalds is a big enough corporation that they can pay the 25 cents per swipe plus the 3% billed to them for using visa/mastercards

  85. rabiddachshund says:

    @brainwav: Link please?

  86. azntg says: You do realize that McDonalds do not directly own and operate many of their stores, right?

  87. rabiddachshund says:

    @ghettoimp: It’s all in the wording and depends on the product.
    Gas may cost $3.98, but if you pay with cash, you get a $.03 discount. However, a coke costs $1.25 but they charge you a $.15 transaction fee for paying with plastic.

    @RChris173: Gotta love elementary school dropouts.

    @Corporate-Shill: Hey. Shut up. It’s all about who’s got the more convincing argument. If you convince them they’re right, you lose. Do you like losing? I don’t. :D

  88. emington says:

    Dear World: Please stop paying with credit cards for small transactions. Remember that thing called “paper money” and “coins”? I don’t have to suffer losing profits, but it annoys the living poo out of me when someone buys a 15 cent item and asks to put it on their credit card. -_-

  89. Lucky225 says:


    It also annoys waiters when people buy $100 worth of food and don’t leave a point. Tough “poo”, that’s the cost of doing business, you were informed of this when you got a merchant agreement.

  90. Lucky225 says:


    Don’t leave a tip, sheesh my mind is elsewhere tonight.

  91. farker says:


    Excellent point. The store I work at (large neighborhood hardware store…not a “big box” place)… I’d say about 80% of the customers use credit cards. The fact that we get charged a fee for all of those transactions is mediated by the fact that we do about $50,000 in sales a week…it doesn’t matter much.

    It shouldn’t fall on the customer to pay for these stupid fees. Merchants should quit being schmucks and rework their merchant agreements to get a lower fee.

  92. magnoliasouth says:

    Wait. So credit card companies forbid asking for ID? That’s what it sounds like. I would think that they should require asking for ID.

    If they should, then I’ve got loads of merchants to report.

  93. @farker:

    There is only so much tugging and reworking that we merchants can do.

  94. Couldn’t the McDonald’s get around this by instead of charging $.25 for using credit offer a $.25 discount for using cash? That would seem to be a way around the merchant’s agreement, at least I think that is how gas stations which charge a different amount for paying gas get around the MA.

  95. @magnoliasouth:

    No, CC companies allow the merchant to check ID’s

    The MERCHANT’s directions for VIAS acceptance.


    On the site are specific directions for checking ID’s:


    “Match the signature on the sales receipt to the signature on the card”

    “If the signatures don’t match ask for additional ID. If the card or receipt and ID signatures don’t match, make a Cone 10 authorization call.”




    If you go over the regular “public” VISA website the statements do no support the statements made by VISA on the merchants website.

    There are many more inconsistancies between VISA’s public statements and rules versus the statements and rules directed to the merchant.

    Bottom line, VISA (and all other CC providers) want the public to have faith in their products and wilfully use their products while at the same time the CC providers go out of their way to screw over the merchants.

    Nice Catch-22 that results in frustration for everybody in the process and higher costs to the consumer (and more $ into the hands of the CC providers and the Merchant Banks).

    Personally I don’t give a rat’s arse whether I should check ID’s or not. I just wish VISA et al had the enough balls to standup and fix the differences between the “consumer” rules and the “merchant” rules.

  96. TheUncleBob says:

    @BillsBurg: If there’s some kind of fraudulent activity related to the charge, there’s a lot more at risk with a $100 transaction vs. a $1 transaction. Not excusing anything, just pointing that out.

  97. @Corporate-Shill: We have all cited the info on [] ad nauseam, and you previously said it wasn’t good enough and tried to cite info from BoA. So I wrote a very lengthy post that proved you wrong with the most authoritative source possible, the Visa USA, Inc. Operating Regulations. I politely asked for your to identify the specific regulations that support your claim, but I’m still waiting.

    (Also, the current quote from the Card Acceptance Guide is “Match the signature on the back of the card to the signature on the receipt. … For suspicious or non-matching signatures, make a Code 10 call and ask for further instructions.”)

    I just don’t understand why you persist in arguing that the moon is made of cheese.

    Personally I don’t give a rat’s arse whether I should check ID’s or not.

    Oh. Maybe that explains it. There’s no shame in a bit of civil disobedience. If you chose to disobey the policy because you disagree, that’s different and you can do whatever you want (and I can stay out of your store). But the regulations are very clear about when you can and when you can’t require ID, and who has the final say.

    On that note, if you’re arguing your position on the basis that you can ask nicely for ID, but you’re aware that requiring it is verboten except in very limited situations, then please make that clearer.

  98. LUV2CattleCall says:

    We (an airline) recently switched to a cashless system, because cash also has a cost to process (internally). The CC company charges a flat percentage. Any “per-transaction” fee is from 3rd party processors – usually those who give you “free” terminals and such. It’s beyond retarded of that McD to go this route, given the high volume/low $$ amount nature of their business.


    A great example of that is how all the CC companies end up eating the cost when an airline goes bankrupt.

    Or the CC companies that have to eat the cost when someone steals your card and fills up with gas (both times I’ve had a CC stolen, that was the first purchase – no ID and no one to check your card = easy fraud channel.


    Why should I have to tip more if I order the Lobster Tail than if I ordered a small salad?

  99. sodden says:

    I was blown away the other week when I discovered Costco won’t accept visa, mastercard, or discover. Only cash, debit cards, and checks.

    Luckily I happened to have my checkbook on me as I had nearly $100 of food getting warm. Normally I don’t carry the checkbook on me, and I absolutely will not use a debit card.

  100. sodden says:

    @LUV2CattleCall: CC companies don’t eat the cost when someone steals your card. They chargeback the store that sold the gas, plus hit them for an additional fee.

    It’s really a bad deal for stores to take credit cards. They have no control over the security of credit cards, and CC companies will even make a profit on stolen cards. They get them coming and going!

  101. sodden says:

    @Michael Belisle:
    ‘Personally I don’t give a rat’s arse whether I should check ID’s or not.’

    “Oh. Maybe that explains it. There’s no shame in a bit of civil disobedience.”

    I think you’re taking him a little out of context there. Dunno if you are doing it intentionally or not but it’s not a nice way to try to win an argument.

  102. @sodden: You might be right, in which case it was unintentional. I see now that Mr. Shill was probably saying he doesn’t care about the debate about whether or not he should check IDs. But, since he frequently shows up to defend ID checking, the evidence suggests otherwise.

    At any rate, the jury shall disregard the second-to-last paragraph of my previous post.

  103. facepalming_flagella says:

    quick question…does this include debit cards? And is this illegal in Texas?

  104. rjgnyc says:

    @twophrasebark: What he’s trying to get at is that it is illegal/against policy for a merchant to go “You’re using a CC – so I am going to charge you extra.

    BUT it is NOT illegal for the third party system that processes the fee to charge you a fee for using their third party system.

    In other words, you’re not being charged more for using a credit card, but you are being charged a fee for using a third party’s system. It’s similar to being charged for using an ATM.

  105. alice_bunnie says:


    Illegal in Georgia, too, if I recall correctly.

  106. RandomHookup says:

    In the early days of Consumerist, didn’t we get some little ice cream store to change their minimum purchase requirement? Seems we could bring that awesome power to bear here as well.

  107. NoWin says:

    One factor some are forgetting is that the fee can be legally charged if a “DEBIT” card is used, buuuut should NOT be charged is you use an actual CREDIT card, or use the debit card as a “signed authorization”, or press “credit” (not debit) button, if available.

    That being said, since most terminals now accept a debit card without PIN or signed authorization by default under anywhere from 50-300 bucks, it processes it as a PIN’d debit card transaction and hence the fee can be assessed.

    I blame Visa/MC and the interchange companies.

  108. AlexPDL says:

    @sodden: Actually…Costco takes American Express too.

  109. jenl1625 says:

    @JoeTan: It’s actually a little worse than that. Not only are the credit card companies advertising that it’s “cool” to make every purchase with plastic, they are explicitly advertising to clients that they should run the charge in a specific (more expensive to the merchant) way . . .

    But they don’t phrase it that way, of course: I got something from my bank a while back, telling me I’d rack up the “rewards” points faster if I would use my bank card as a credit card rather than as a debit card. (The slogan was something like “skip the pin”.) The only logical reason for them to be advertising that is higher fees paid by merchants on a credit charge.

    How many merchants are now eating even higher processing fees now, so that tons of people accumulate points towards stupid “rewards” at a slightly faster pace?

  110. For as much as consumerist encourages readers to report violations directly to the credit card company, I wish the Consumerist could have an interview directly with the credit card companies to hear what they do to follow through with these violations. Never have we heard of a credit card company removing its merchant agreement for a company.

  111. MMD says:

    @doctor_cos: It’s illegal in New York State, too.

  112. mac-phisto says:

    @jenl1625: but you’re ignoring the benefit to the merchant entirely here. it’s widely held that people who use a card to pay for purchases spend more than if they use cash. here’s a decent article that explains the phenomenon a bit –> []

    i can honestly say that i’ve found myself doing this also. if i walk into a store with $20 looking to buy something for that amount, but i find other things along the way i need/want, my card comes out & my purchase balloons not just by the cost of a few items, but sometimes thrice my original target cost.

    mcdonald’s is not immune to this trend. people will go in expecting to buy dollar fries & walk out with a large-sized double qp w/ cheese, a happy meal, 2 apple pies & a shake.

    & it’s not as if the margin doesn’t exist to pay merchant fees in this instance. mcdonald’s restaurants are some of the most highly profitable ventures around. franchise owners often create enough wealth within a few years to expand their chains across entire regions.

    but they can’t afford interchange fees?!?

  113. Miguel Valdespino says:

    I have a favorite eatery that charges $0.50 on credit card use under $10. I complained loudly, explaining that it was illegal under California Civil Code section 1748.1 and they waived them to shut me up. The same person usually takes my order and she always waives the fee. They still charge it to other people and I have to make a stink every so often when somebody else is at the register, but that’s fun.

  114. rjgnyc says:

    @Michael Belisle: I kind of like that some places ask for me to show ID when I don’t have to enter a PIN for my debit/credit card.

    I’m sure there are all sorts of apparent rights violations going on, but I’d rather someone ask for something that I carry on me anyway for that specific purpose than have someone do a little identity theft.

    @Miguel Valdespino: I’m sure it’s fun to help credit card companies make money by convincing you that you have to charge for every purchase under the sun!

  115. erratapage says:

    Why don’t companies just raise prices to cover the average cost of the fees over time? That might be difficult for a MacDonalds, since even the franchises have to price within a range, but most businesses can set the cost of goods and services.

    Me? When I started accepting credit cards, I raised my prices to cover the cost (and make more money). I also raise my prices when I add other conveniences for my customer.

    I don’t believe in surcharges. I also don’t believe in worrying about the dime profit I’m losing on a pack of gum, when overall, I’m in the black to my satisfaction.

  116. meske says:

    If you attempt to use the DMV online service in NJ (i.e. re-upping a car registration), there is an additional $2 – $3 fee that is 100% to offset the credit card usage charge (it’s in their FAQ). So, instead, I mail a check with a $.4X stamp, and have a human process the request and mail it back. Not sure the labor rates at the state, but I image it has to cost at least a couple dollars for a human to handle a real live check. Who knows….

  117. Umisaurus says:

    My local convenience stores ask to have a purchase over five dollars for card transactions, which I don’t mind because they’re mom-and-pop shops which deserve the little money they’re making.

    Taco Time, however, can eat it. I think I might just file a complaint right… about… now.

  118. magnoliasouth says:

    @Corporate-Shill: Thanks for the answer, which by the way is definitely illuminating.

  119. mebaman says:


    Simple: The credit card lobby is stronger than the small business lobby.

  120. Anonymous says:

    I was going over my checkbook and could not figure out why there was a 25 cent charge from a place called Adele Services.
    That’s when I looked up this place about McDonalds!! What cheap shot!!! Can’t put McDonalds on the invoice, what a way to rip off the little people, when they make billions!!!