MsKiwi wrote:This is true but I still see many stores with signs that require minimum purchases. Maybe I'll challenge one of these merchants.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.
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
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?
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.
I certainly have no desire to argue, either. 
I thank you for your kind comment.
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.
cheddar wrote:I certainly have no desire to argue, either.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!
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.
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.
Message Edited by cheddar on 06-25-2008 12:13 PM