Shop Charges $.50 Fee For Credit Card Purchases Under $10

I spotted a coffee shop charging customer a $.50 for using a credit card on any purchase that is under $10. It doesn’t break any laws, but it does violate their agreement with the credit card companies.

Vendors are allowed to give customers a discount if they pay in cash, but they’re not supposed to charge an extra fee on credit card transactions.

VISA’s merchant agreement says,

You may not impose any surcharges on VISA transactions. You may, however, offer a discount for cash or another form of payment (e.g., proprietary card or gift certificate) provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.

Mastercard’s says,

“A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments.”

If you wanted to, you can report a store to the credit card company. But since that’s an agreement between the store and the credit card company, it’s up to the issuer to do anything about it. I paid in cash.


Edit Your Comment

  1. Preyfar says:

    The cafeteria at my work does this, but they charge .50 on any sale under $5. I brought up the Visa/Mastercard agreement with them, and they said if I had a problem with their policy they’d just bar me from using credit cards there altogether. No ifs, ands or buts.

    I reported it. Nothing ever happened.

    • startertan says:

      There is a pizza place near me that caters to the college across the street. The place is run by giant a-holes. All they care about is taking pictures with and trying to mack on the coeds. They also charge a.50 convenience fee on ANY credit card purchase.

      I want to report them as well but I have a feeling it would end up like Preyfar.

    • msbask says:

      I never understood this. The “merchant agreement” is between Visa and Ye Ole Coffee Shop. How is it any of our business to tell a merchant that they’re breaking an agreement with the other party to the contract, when we ourselves are not party to that contract?

      If they’re not following VIsa’s rules, report them to Visa. Telling some clerk about the legalities of the contract between their boss and Visa Corporation seems silly. What would YOU do if you were the clerk? I’d probably stare at the customer and say “Ok. What would you like ME to do about it?”

      (not snarking, really. just wondering).

      • crazedhare says:

        Third party beneficiaries of contracts have enforcement rights in certain situations.

        If A and B make a contract to which they are the only parties, which is intended to provide protections to C, in some cases C can enforce the contract against the parties. Not all situations, mind, and I have not done the research to determine whether or not or to what extent, if applicable, courts have treated consumer-purchasers as intended beneficiaries under a third party analysis, but your implied suggestion that it is utterly off base to allow a third-party beneficiary standing under a contract is not quite accurate.

        For more info, a broad overview:

      • Kristoffer says:

        I agree with the second part of your comment but not sure about the first. I understand that the agreement is between the business and the credit card company. In this case they are breaking that agreement by charging me an extra 50 cents, which does affect me (or make it my business) even though I am not part of that contract… so don’t I have a right to at least voice my complaint to the business owners?

    • gStein_*|bringing starpipe back|* says:

      i ran into this a few years ago, ordered food and gave my CC# over the phone. delivery guy showed up and there was a surprise $1 charge for credit card use. i called visa and they reversed $1 of the charge.

    • dg says:

      If they pulled that shit, I’d walk up with a tray of food every day, offer to pay with a credit card and when it was refused, I’d leave the tray of stuff there and walk away.

  2. obits3 says:

    “Cash sales under $10 will get $.50 of their bill” *Raises all prices $.50


    • Alvis says:

      So long as everyone only buys one item?

      • mrstu says:

        “There is a 50 cent convenience fee for purchaces under $10, this fee will be waived for those paying with check or cash” There ya go.

    • cyko79 says:

      Easier fix: “All prices are assuming a $0.50 cash discount for purchases under $10”

    • Griking says:

      So really whats the difference between saying $.50 more if you pay with a card or $.50 less if you pay with cash? It’s the same thing, it’s just a play on words. The only other option is to pay with a check and most stores don’t seem to accept them at all any more anyway.

  3. pecan 3.14159265 says:

    I’m just surprised the text on the label is spelled correctly.

  4. rpm773 says:

    Several gas stations in my area have been doing this for the last few years. The price on the sign is the cash price, not the credit price. Now, most say “cash price” on the sign as well, but I’d rather see the credit price. I haven’t paid cash for gasoline since I was in college – in 1997 when it was 99 cents/gallon.

    As such, I don’t buy gas at those places.

    • tbiscuit360 says:

      This is perfectly okay because the cash price is a cash discount price.

    • Willow16 says:

      The difference in price between cash and credit is significant in my town so I always pay cash. In fact, the station I go to doesn’t even take credit cards and they are usually .10 less a gallon than the other stations in the area.

  5. Sitbacknwatch says:

    My favorite deli used to have a sign that they wouldn’t accept credit cards unless they were spending over 25 dollars. I complained to the credit card company and a few weeks later the sign was gone.

    • ssaoi says:

      Way to stick it to your favorite deli! Now they make less money. That’ll show ’em!

      • JohnnyP says:

        Ill tell you the same thing that I told the last store manager that charged me 50cents extra for using a card.
        Don’t take it out on the customer. Complain and write letters to you representatives. And make sure that your processor is the best price otherwise your just taking the easy way out and sending customers down the street.

        • ClaudeKabobbing says:

          I would just say No thanks and Walk out. Nothing says you have to shop there or accept the policies.

          That said I have no problems with business charging a fee to use a credit card. After all I can choose to shop somewhere else.

      • jebarringer says:

        So we should just let businesses get away with whatever they want?

        • ssaoi says:

          What the hell did they “GET AWAY WITH?” Instead of raising the prices of everything they sell, they didn’t accept charge charges under a certain amount, which is now the law of the land.

          When you use a credit card, you cost the business more money. I’m glad they are finally getting back some of their rights.

          • MMD says:

            And what “rights” would those be?
            I don’t worry about a store’s electric bill, but that figures into an item’s cost, too.
            Credit cards are part of the cost of doing business. Period.

          • nucwin83 says:

            Don’t want to deal with the costs involved in these transactions… don’t take credit cards. The 10$ minimum allowance for CREDIT cards (note, that there is still no minimum allowed for debit per the law or merchant agreements) is a fair compromise. If a business decides that enough of their customers use credit cards to justify offering that payment option, then they need to deal with the costs involved.

        • Griking says:

          No more than businesses should let consumers get away with anything they want.

      • coren says:

        It’s not my, or anyone but the deli’s, job to worry about their profit. There are many other costs associated with business too – should I pay fees and absorb those as well?

      • Sitbacknwatch says:

        they signed an agreement, they’re in violation of that agreement. If they want to continue to accept credit cards they need to follow the rules they agreed to. Simple as that.

        • ssaoi says:

          You have a choice of paying cash or credit. If this is a “favorite deli”, you wouldn’t want to help them when it costs you exactly the same amount? Or are you suckered in by the awesome 1% back on your cards? If this is truly a Favorite Deli, how does it benefit you to be a snitch?

          And the blind argument is ridiculous on so many levels.

  6. Darrone says:

    I started paying cash at a local station that provides both prices (cash/credit), probably 10-20 cents a gallon, totally worth it.

    • nucwin83 says:

      I found that my BP card gives me a greater discount than the cash option. Generally the difference is about 3-5 cents, which on a 2.90/gallon purchase is between 1 and 2 percent, whereas my BP card gives me 5% cash back. The even better ones are the few I’ve encountered that offer the cash price to BP cardholders (which is, I think, a violation since it favors one brand of card over others, but I wasn’t going to complain of course…)

      • Darrone says:

        But then you would be required to buy BP… (and where do you get gas? thats both crazy expensive and a shitty discount.)

  7. nbs2 says:

    I thought that the big financial reform hoop-dee-do included an allowance to allow this. No?

    • Supes says:

      It allowed stores to refuse credit cards for purchases under $10. Nothing about discounts, this is still governed by the credit card agreements stores sign.

      • evnmorlo says:

        Cash discount was always allowed. The new law forces credit card companies to allow merchants to offer discounts for certain cards

    • mdgolom says:

      My understanding is the restriction to prohibit “minimum charges” was rescinded as long as it was evenly applied to all credit cards. They are allowed to have a minimum up to $10.00. I would still refuse to frequent anyplace that does that.

      • Kryndar says:

        You would frequent them if the minimum was that high or if they had any at all? I am just wondering because the lowest amount I have ever ran through on card was 97 cents. I really really wanted to say no, I didn’t for various reasons, nor did I make any comment, but seriously 97 cents?

      • RvLeshrac says:

        When you run a business and have to pay out 90% of your profit in fees every time someone runs a credit card, you can start complaining.

  8. wonderkitty now has two dogs says:

    A coffee shop that has a charge for CC purchases under TEN BUCKS? I would never, ever go there. I couldn’t possibly eat and drink $10 worth of coffee shop fair.

    If I decided to go to this place for whatever reason, I’d get a gift card for ten bucks then use it in the future.

    • minjche says:

      The gift card sounds more inconvenient to me (extra steps compared to cash, plus you have to make sure to use every cent on it or otherwise keep reloading it).

      But hey, I hope you enjoy proving that point!

      • wonderkitty now has two dogs says:

        Yeah, tons of people do that at Starbucks all the time for their card program. People reload them. And yes, of course it takes extra steps to use and reload a gift card. I would think that most people realized that, and it didn’t need to be pointed out.

        No need to get all snarky about it, either.

        • jamar0303 says:

          Plus side is that Starbucks gift cards can be carried over to other countries. That’s a little less cash you have to exchange if you’re going overseas.

  9. Tongsy says:

    Pretty crappy that you post about things like this but give absolutely no mention to Usage Based Billing, which will make internet costs go up by 50%+ for the majority of Canadian Consumers.

  10. VeiledThreats says:

    In my beloved state of California, as pointed out before I’m sure, charging ANY kind of surcharge by a non-governmental agency for a credit card purchase is illegal, not just a violation of the merchant agreement.

    • MMD says:
    • trentblase says:

      Wow, GREAT info here. Actually puts some teeth into merchant agreements, which we all know are basically ignored by everyone. For California, there appears to be a small claims court remedy. As a liar (lawyer) I can even get reasonable fees for my time spent preparing:

      ” (b) Any retailer who willfully violates this section by imposing a
      surcharge on a cardholder who elects to use a credit card and who
      fails to pay that amount to the cardholder within 30 days of a
      written demand by the cardholder to the retailer by certified mail,
      shall be liable to the cardholder for three times the amount at which
      actual damages are assessed. The cardholder shall also be entitled
      to recover reasonable attorney’s fees and costs incurred in the

      Note: This is not legal advice, and I’m not your lawyer. Gotta include it.

  11. tweeder82o says:

    i came back later and blew up the store

  12. Sparty999 says:

    The “minimum purchase” amounts are BS. If I had $3.83 in cash, I would have handed it to you!! take my card just like everyone else!

  13. swat1227 says:

    The Shell station near where i live does something equally as horrid: I was going to start using them, considering I got the ten cents off per gallon for shopping at nearby Giant, until I realized they tack on five cents extra per gallon if you pay with a credit card. Is that allowed?

    • JohnnyP says:

      They should have the sign at the street reflect the highest price and offer a discount for using cash. I won a charge back against a station that didn’t follow those rules.

  14. eskimo1981 says:

    A fast food restaurant in my area charges an extra $0.50 for debit card purchases regardless of the amount.

    The first time I tried to pay debit there, they had prepared my food and it came time for me to pay, the fee appeared on the screen of the machine asking for my pin. I argued that I wouldn’t pay the fee, they refused to relent, and I walked away without taking the food.

    I eat at other restaurants in that food court when I go now.

    • squirrel says:

      Those idiotic machines (Arby’s has them) charge a fee for debit, but nothing at all for a credit transaction.

      Tell them it is a credit transaction.

  15. NoThankYou says:

    Arco charges to use your card.

  16. sonnyjitsu says:

    Are companies allowed to not accept cc payments for an amount say under $10? I’ve run into this a lot and it annoys the crap out of me.

  17. jason in boston says:

    There was a coffee shop near BU that tried this. Someone called the number on the back of their card and they put up a “cash preferred” sign with how much the merchant fees cost them. I think that is a good compromise.

  18. internetsguy says:

    If they’re going to impose a minimum purchase limit, I’d rather see this $0.50 fee than a flat-all-credit-purchases-must-be-over-$10 rule. You’d probably spend way more than $0.50 on stuff you don’t need trying to get over $10 limit.

  19. xamarshahx says:

    Small businesses really get screwed since they usually rent this equipment and pay a per transaction plus a percentage of the sale. New financial regulation will allow small businesses to do this without violating the agreement, but as a rule of thumb, unless its a starbucks or something, you are screwing the business by using your cc on a 2 dollar transaction.

  20. MMD says:

    Au contraire!

    Credit card surcharges *are* illegal in ten states, including New York.

  21. ajlei says:

    I see this everywhere in Portland. It’s irritating.

  22. heismanpat says:

    I wonder what would happen if somebody went ahead and paid the fee, but later disputed the charge with the credit card company. Credit Card companies don’t seem to enforce this condition of the merchant agreement when it is reported ahead of time, but I wonder what they would do after-the-fact. I bet stores/restaurants would stop this nonsense if it started to negatively impact their cash-flow. I’m inclined to try it some time. The entertainment value would be worth the risk of losing $.50.

  23. PeteWa says:

    A local store tried to charge me extra, when I took a photo of their sign they demanded that I remove it and they removed the charge. fun

  24. coren says:

    Cash discount and card fee are the same goddamned thing. I wish they’d close that bullshit loophole.

    I also wish there were actual action to take about this that was effective.

  25. jheyneman says:

    I reported the drive-thru carryout near me for this. I reported them to both Visa and Mastercard. Within a week, they were unable to accept credit or debit cards for at least a few weeks.

  26. eli says:

    I don’t get why you people care. Either pay the $0.50 or don’t. It’s not like they’re being sneaky about it.

    • MMD says:

      If I don’t follow the terms of my contracts, action may be taken against me. And rightly so – if I didn’t like the terms, I shouldn’t have made the agreement.

      Seems only fair that businesses honor their merchant agreements. That’s why it bugs me.

  27. osiris73 says:

    We have a local Dairy Queen that charges $1.00 for anything other than cash or check. We have a gyro place that charges $.30 for any thing other than cash or check.

  28. djkrztoff says:

    The small store in the building won’t accept cards at all under $3.00. I was 1 penny short of their limit one day, and they refused to take my card. Pissed off, I attempted to report it to wells fargo, but they explicitly told me to call visa directly who, as you can probably already guess, told me to call wells fargo.

    Neither Visa nor Wells Fargo REALLY give a shit, and I don’t spend money at that store any longer.

  29. howie_in_az says:

    ARCO gas stations have been doing this for years and continue to do it. wtf, Visa/Mastercard?

  30. VicMatson says:

    The Howard county(in Maryland)court charges $8 bucks in fees if you use Visa/Master to pay a fine. And they are the law!

  31. Donathius says:

    The University I work for has a two dollar minimum for food services. I’ve thought about reporting them, but I think they’d just stop accepting credit cards altogether instead of changing their tune about it.

  32. lordargent says:

    ssaoi: What the hell did they “GET AWAY WITH?” Instead of raising the prices of everything they sell, they didn’t accept charge charges under a certain amount, which is now the law of the land.

    When you use a credit card, you cost the business more money. I’m glad they are finally getting back some of their rights.

    Since credit cards are voluntary, they could just choose to not accept credit cards.

    /Also, business don’t have “rights”, people do.

    • sqlrob says:

      /Also, business don’t have “rights”, people do.

      Except business are “people” according to precedent.

  33. Bog says:

    So, start carrying $100.00 bills. Give the merchant a choice. Either break the $100.00 for that $6.95 six-pack, or take the credit card with no surcharge.

  34. abberz3589 says:

    The hot dog stand on campus does this for purchases under 4 bucks.
    I’m sure they make a killing- most everyone gets a hot dog and a coke, which costs 3.

  35. newyorkjerry says:

    Here, in New York City, Golden Chicken restaurant adds an 80 cent “convenience charge” to every credit card purchase, and doesn’t tell you. (There is a small, easy to miss sign on the cash register saying this. I’ve complained to Mastercard, Visa and American Express, all of which have said that this violates their merchant agreement, but none seems willing to stop this little take out shop from adding the charge.

  36. dilbert69 says:

    I’ve always thought this was the dumbest rule ever. What’s the difference between a cash discount and a credit card surcharge? Exactly nothing.

  37. balthisar says:

    Pay the fee, get it on your receipt, and do a chargeback for the 50¢.

  38. pdcorcoran says:

    If they need to charge 5% more for credit cards because credit card fees are around 5%, then that must mean that all of the tasks involving cash (counting, taking to bank, insurance, etc., etc.) must be free.

  39. pdcorcoran says:

    If they need to charge 5% more for credit cards because credit card fees are around 5%, then that must mean that all of the tasks involving cash (counting, taking to bank, insurance, etc., etc.) must be free.

  40. nocturnaljames says:

    Maybe you shouldn’t support the banks greed with all those credit card merchant fees. You are really hurting companies forcing this issue.

  41. dreamcatcher2 says:

    I don’t understand why Consumerist is carrying Visa’s torch. Visa causes retailers to raise prices, especially on those cheaper items that can’t profitably be sold via credit card. Higher prices is anti-consumer. I think consumers and retailers alike would be better off if there were more competition in the payment card industry.

    The business model for Visa is to (a) get a network-effect monopoly, which the banks encourage because they own most of the shares in Visa (b) charge retailers much higher fees than they need to for the basic credit card processing and fraud detection, which causes retailers to raise prices (you can’t NOT carry Visa, it is a network-effect monopoly, so market forces don’t keep it own) and (c) spend all that extra revenue on marketing and customer kickbacks.

    Why is it that Gamestop and Kohls will practically chase you out to your car to try to get you to sign up for a credit card? Because Visa has created a system that is so effective at extracting value from retailers to generate profits in the payment processing system that credit card sales become an indispensable part of the total revenue of these retailers. All of that profit comes from the higher prices that retailers are forced to charge customers. It’s a crazy feedback loop.

  42. Bella_dilo17 says:

    It costs money for a store to process the charge. I think it’s fair. It’s 50¢. Big deal.

  43. physics2010 says:

    1) Remember laws just changed all over the place. Retailers can now set a $10 minimum purchase requirement for credit cards.
    2) The federal law preventing surcharges was removed in 1984
    3) Surcharges were still frowned upon by credit card companies, but not exactly illegal unless of course you were in one of the following states who still have laws against the surcharges: CA, CO, CT, FL, KS, MA, ME, NY, OK, and TX.
    4) The perfectly legal way to get around #3 is to offer cash discounts instead of presenting it as a surcharge.

    So what State is the sign in?

  44. msingerman says:

    I wonder if they charge customers who come in at night extra because they have to turn the lights on…

  45. SugarMag says:

    My bank charges me 50cents to use my debit card so a vendor charging a fee isn’t that different to me.

    I’ve been aware of the merchant fee for ages, so that is partly why I maintain cash as the main paying option for smaller purchases. I find it a bit disgraceful actually that banks can charge the merchant a percentage simply for the privilege of accepting (their) payment yet the merchant cannot charge their customers directly, seems improper.

  46. pot_roast says:

    Yet another example of how “mom & pop” coffee shops/etc will still turn around and try to screw you, just like the big companies.

  47. D in Buffalo says:

    There’s this chinese food place that I frequent; they moved into a new storefront not too long ago. Before the move, they were cash only. After the move, they started taking credit cards..but with a $15 minimum and 5% tacked on!

    • MMD says:

      If you’re in Buffalo, NY, you’re in a state where credit card surcharges are illegal. Time to call the state’s attorney general.