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Re: Is being ask to show ID against credit card/merchant agreement

[ Edited ]


MsKiwi wrote:


 
 
A friend of mine who had his own retail business used to require a minimum purchase for CC transactions.  One day he received a letter from Visa or MC (don't remember which one) that he needed to stop that practice.  Instead, he (stupidly, IMO) chose to stop taking CCs altogether.
 
I reported a restaurant across the street from where I work for requiring a $15 minimum on CC transactions.  Shortly after that, the Visa and MC logos disappeared from their front window.
 
Merchants are not allowed to make their own rules or set their own policies when it comes to these things.
 


This is true but I still see many stores with signs that require minimum purchases. Maybe I'll challenge one of these merchants. Smiley Surprised


You guys are correct about the merchants not being able to require a minimum purchase to use a credit card, but before going around reporting everyone that does, think about the repercussions for these business owners. I'm sure many of them don't even realize that they are in violation of their agreement. You should see the packages that arrive when you get a merchant account, one fo Visa/MasterCard, another for discover and another for Amex, then from the bank who issues the merchant account. You think you get fine print when you are issued a personal credit card...that's cake compared to this.
 
Also, keep in mind that in this economy a lot of business ownes are doing what they can just to stay a float. We all advise to keep a card active by buying a pack of gum, I used to do that too, until I found out what it cost the merchant just to pay with a credit card. Let's say the stores purchase that pack of gum for $.20 but they sell it for $.50. In addition to the monthly fees for being able to process credit cards, the merchant bank is going to take a transaction fee of anywhere from 20-30 cents just for running the credit card through the machine. If your card won't swipe and they have to manually type in the numbers, they get charged more for that too. On top of that, they also take a portion of the total price for the transaction...depending on the volume of the store (more volume gives them better rates, so small business gets hit the hardest) that could be anywhere from 1.5-3% of the transaction total. So...do the math, that store just LOST money on your transaction.  Not only did they not make a cent, they are eating money. This also does not factor in the cost of employees to order, stock and rin up the items...
 
So you see....while you are absolutely correct, they should NOT be putting up signs saying there is a minimum purchase amount and yes they are in violation of their agreement, just consider how devastating the consequences can be for those businesses if you report them. It's not Wal-Mart or Starbucks putting up those signs, it's likely the smaller mom & pop shops doing it. Calling and reporting them could be the final straw in putting them out of business. I wouldn't want that hanging over my head, even if they are in violation of their credit card agreement. I say, let the credit card companies worry about regulating those rules.


Message Edited by UpUpUp on 06-25-2008 08:30 AM
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Re: Is being ask to show ID against credit card/merchant agreement



cheddar wrote:
TexCredit is correct.  Merchants are not allowed to require ID in order to complete a credit card transaction, as long as the card is signed on the back.  They are supposed to compare your signature on the back of your card with the signature on the sales slip, and nothing more.
 
Those who require ID will say it is a measure of fraud and identity theft prevention.  Perhaps, but it is a matter of protecting the merchant from these types of fraud, not the consumer.  Showing my ID to a complete stranger who is working behind the counter actually puts me at greater risk of ID theft, IMO.  Nobody needs to see my ID to complete that transaction.
 
If they require ID or if they require minimum purchase amounts in order to use a CC, you may report them to Visa and/or MasterCard, who do follow up on these complaints.
 
A friend of mine who had his own retail business used to require a minimum purchase for CC transactions.  One day he received a letter from Visa or MC (don't remember which one) that he needed to stop that practice.  Instead, he (stupidly, IMO) chose to stop taking CCs altogether.
 
I reported a restaurant across the street from where I work for requiring a $15 minimum on CC transactions.  Shortly after that, the Visa and MC logos disappeared from their front window.
 
Merchants are not allowed to make their own rules or set their own policies when it comes to these things.
 


Thanks Cheddar.  I thought you would chime in eventually.  Would I just go on Visa's or MC's websites and lodge a complaint or is their a number I can call?
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Re: Is being ask to show ID against credit card/merchant agreement



UpUpUp wrote:

You guys are correct about the merchants not being able to require a minimum purchase to use a credit card, but before going around reporting everyone that does, think about the repercussions for these business owners.


You are 100% correct.  I do not go around reporting every violation I see, regardless of the impression given by my previous posts.
 
I have only reported one business, and that was the restaurant I mentioned earlier.
 
In that case, I did speak to the restaurant owner/manager himself prior to calling in the complaint.  What prompted me to report him was his complete dismissal of my complaint.  He had no interest in even hearing me out, and he shrugged me off and walked away from me while I was mid-sentence.  Since I was not able to get through to him, I figured I would let Visa/MC do it for me.
 
In other cases, I have politely, yet firmly, said to the cashier something along the lines of, "You're not allowed to require minimum purchase amounts for a credit card.  Here's my card, please just swipe it."  On occasion, when the cashier tells me he or she is not allowed to, then I speak to the manager, who will usually be so "generous" as to make an "exception" for me, just this once, you understand.
 
In cases where I am asked for my ID, I simply say, "You don't need to see my ID."  That has worked every time for me.  Not a single cashier has pressed the issue after being told that I refuse to show it.
 
Quite often, these additional layers of "security" are being enforced by people who really don't care if they're enforced or not.  Getting around them no questions asked is simply a matter of challenging them on it.
 
"I need your ID."
 
"No, you don't."
 
"OK, I don't."
 
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Re: Is being ask to show ID against credit card/merchant agreement

[ Edited ]
Thanks for the follow up post Cheddar.  I can see why you were frustrated with the response or lack thereof from the manager/owner.  I just didn't want your one report to encourage a flock of myfico members making calls to Visa/MC without thinking of the potential damage it could do to those business owners and their familes. 
 
One other thing I totally forgot to mention in my last post, which isn't really relevant in reporting a merchant for posting a minimum purchase requirement, but does related to the flock of fees they are charged for small purchases...is that the secret behind our rewards cards is that the merchant picks up a big chunk of the cost of that too. I learned this after establishing my own merchant account. So, the banks aren't being as generous as they lead us to believe. Every business gets different rates and like I said earlier, small business gets whacked the hardest because they don't do the volume needed to negotiate the lowest rates like large corporations do, but I know that with my rates any time someone uses a rewards card, I get charged an extra 1.50%  in transaction fees. Just thought that was a tidbit everyone might be interested in knowing.
 
I also agree with the ID thing. It's too dangerous for someone to see all of that information. I have done what a previous poster mentioned and held it with my finger over the information. I have also noticed that most merchants and their employees do simply look at the names and not the signature. 



Message Edited by UpUpUp on 06-25-2008 10:22 AM
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Re: Is being ask to show ID against credit card/merchant agreement



UpUpUp wrote:
Thanks for the follow up post Cheddar.  I can see why you were frustrated with the response or lack thereof from the manager/owner.  I just didn't want your one report to encourage a flock of myfico members making calls to Visa/MC without thinking of the potential damage it could do to those business owners and their familes. 
 
One other thing I totally forgot to mention in my last post, which isn't really relevant in reporting a merchant for posting a minimum purchase requirement, but does related to the flock of fees they are charged for small purchases...is that the secret behind our rewards cards is that the merchant picks up a big chunk of the cost of that too. I learned this after establishing my own merchant account. So, the banks aren't being as generous as they lead us to believe. Every business gets different rates and like I said earlier, small business gets whacked the hardest because they don't do the volume needed to negotiate the lowest rates like large corporations do, but I know that with my rates any time someone uses a rewards card, I get charged an extra 1.50%  in transaction fees. Just thought that was a tidbit everyone might be interested in knowing.
 
I also agree with the ID thing. It's too dangerous for someone to see all of that information. I have done what a previous poster mentioned and held it with my finger over the information. I have also noticed that most merchants and their employees do simply look at the names and not the signature. 

My general agreement with this post notwithstanding, I do want to point out that credit card merchant fees are a tax-deductible expense of doing business.
 
Any merchant does, of course, have the option of avoiding this expense by not accepting credit cards.  However, they cannot have the best of both worlds.  If they're going to accept credit cards and the additional business that they bring into the store, they have to play by the rules.
 
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Re: Is being ask to show ID against credit card/merchant agreement

I agree that they should play by the rules, I DO.  I'm just saying, to think about it, before doing something so significant. We see people run stop signs and red lights all day too, but I doubt we call the police to report each one...
 
Since you are aware that they are a tax deductible item, I'm sure you are also aware that just because something is an allowable expense, doesn't exactly make it a wash when it comes to tax time. Anyway, I'm not looking to argue symantecs. In fact, I'm not looking to argue at all. I really like it here and I think Cheddar, you give some of the most valuable advice on this forum, I just didn't want to see some hard working business owners lose their only source of income because people went on a spree of violation reporting.
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Re: Is being ask to show ID against credit card/merchant agreement

I certainly have no desire to argue, either. Smiley Happy  I thank you for your kind comment.
 
I suppose one's opinion on this depends on one's perspective.  As a consumer and credit card user, of course I have a slightly different view than a merchant who accepts credit cards and pays the interchange fees.
 
I understand that the fees are not a wash just because they are tax deductible.  My point is that they are a cost of doing business, and like every investment in the business, the merchant/owner hopes that the investment will help contribute to the bottom line.  The alternative for the merchant, of course, is to stop accepting credit cards at all.  That means, however, that my business (and the business of others like me) will be taken elsewhere.
 
So in the end, merchants who pay the interchange fees do so because they bring customers into the store.  If they don't want to swipe my $5 lunch because it costs them too much to do so, there is usually a merchant down the street who will be more than happy to.
 
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Re: Is being ask to show ID against credit card/merchant agreement

I had no idea they couldn't ask for ID when you pay with a CC.  I didn't know they can't have a minimum purchase policy for CCs either. 
 
Thanks guys for all the useful information in this thread.  I don't recall the last time I was asked for ID, but now I know to refuse if someone does ask me.
 
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Re: Is being ask to show ID against credit card/merchant agreement



cheddar wrote:
I certainly have no desire to argue, either. Smiley Happy  I thank you for your kind comment.
 
I suppose one's opinion on this depends on one's perspective.  As a consumer and credit card user, of course I have a slightly different view than a merchant who accepts credit cards and pays the interchange fees.
 
I understand that the fees are not a wash just because they are tax deductible.  My point is that they are a cost of doing business, and like every investment in the business, the merchant/owner hopes that the investment will help contribute to the bottom line.  The alternative for the merchant, of course, is to stop accepting credit cards at all.  That means, however, that my business (and the business of others like me) will be taken elsewhere.
 
So in the end, merchants who pay the interchange fees do so because they bring customers into the store.  If they don't want to swipe my $5 lunch because it costs them too much to do so, there is usually a merchant down the street who will be more than happy to.
 


I do believe it probably is a matter of one's perspective.  I see it from both sides I guess.  And, I agree, there is always someone down the street that will swipe your $5 lunch, and mine too for that matter. I'm not saying I don't use my card for small purchases, ever...that would be a lie. I'm just saying, I do now consider the cost to the merchant when I run into a convenience store to buy a $1 drink and use my credit card. I do try to keep $10 on me to make small purchases, etc. I also make an effort to pay in cash at the mom & pop pet store in our town. I LOVE the owners and they treat me very well, so I figure I might as well save them a buck or two with my purchases.
 
In the end, it is a decision for the merchants to determine whether the risk outweighs the benefit, though in my opinion I think nearly any business these days deciding not to accept credit cards is losing a large volume of business. I just feel for those that are stuck in that middle point where they are dam*ed if they do and dam*ed if they don't, I suppose. I also wouldn't want to hurt any innocent employees, because we know if the business is losing profits, the first ones to make the cut are the employees.  I know this is going round in circles now, I just wanted it to be in the back of people's minds if they were considering reporting their local businesses.  But, it is certainly their right to do so.
 
Thanks for keeping this a friendly debate. It's so nice when we can discuss things with a different perspective and it not turn into something heated!
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Re: Is being ask to show ID against credit card/merchant agreement

[ Edited ]


UpUpUp wrote:
 
I do believe it probably is a matter of one's perspective.  I see it from both sides I guess.  And, I agree, there is always someone down the street that will swipe your $5 lunch, and mine too for that matter. I'm not saying I don't use my card for small purchases, ever...that would be a lie. I'm just saying, I do now consider the cost to the merchant when I run into a convenience store to buy a $1 drink and use my credit card. I do try to keep $10 on me to make small purchases, etc. I also make an effort to pay in cash at the mom & pop pet store in our town. I LOVE the owners and they treat me very well, so I figure I might as well save them a buck or two with my purchases.
 
In the end, it is a decision for the merchants to determine whether the risk outweighs the benefit, though in my opinion I think nearly any business these days deciding not to accept credit cards is losing a large volume of business. I just feel for those that are stuck in that middle point where they are dam*ed if they do and dam*ed if they don't, I suppose. I also wouldn't want to hurt any innocent employees, because we know if the business is losing profits, the first ones to make the cut are the employees.  I know this is going round in circles now, I just wanted it to be in the back of people's minds if they were considering reporting their local businesses.  But, it is certainly their right to do so.
 
Thanks for keeping this a friendly debate. It's so nice when we can discuss things with a different perspective and it not turn into something heated!


I agree that it is nice to have a civilized debate from different perspectives without getting out of hand.  Thanks for helping to keep it that way. Smiley Happy
 
You're right that we seem to be going in circles, but I was thinking about this earlier and have just a couple of things to add.
 
In spite of the interchange fees that merchants have to pay (which I agree can be pretty onerous, especially in the cases of Amex and Discover), there are siginificant benefits to merchants for accepting credit cards, besides just the obvious reason that people who want to use them will shop elsewhere if they can't use them in a particular store.
 
There have been several studies showing that people who buy on credit spend more than people who buy with cash.  This is a significant advantage for stores that accept credit, since they will generally have higher sales, all else equal.  This is particularly true in the case of rewards cards.  There is a psychological effect to using a rewards card that leads people to spend more than they otherwise would, and the merchant directly benefits from this effect.  Also, merchants who accept credit cards are able to reduce their costs involved in handling, counting, sorting, storing, securing, and transporting large amounts of cash.  Employee theft is less of an issue, as well.  Yes, there is still cash in the drawer, but not nearly as much as there would be in a "cash only" store.
 
I am aware that the requirement for merchants to pay interchange fees leads to higher prices in general, as merchants pass these costs on to consumers.  From the individual consumer's perspective, however, if the prices are going to be higher due to these fees anyway, why shouldn't I be one of the few who benefit from that scenario by accumulating rewards on my cards rather than one of the many who happily pay the higher prices and get no benefit?  I understand that if everyone were to stop using rewards cards, the interchange fees would drop dramatically, but that's just not going to happen.  As long as merchants are paying the price and passing it on to me, I'd rather get some benefit from it.
 
Smiley Happy
 


Message Edited by cheddar on 06-25-2008 12:13 PM
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