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01/05/2010

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Dan

I own a tobacco shop and the profit from a single pack is about 0.25cent and you are telling me to pay a flat fee of 25+x% for every transaction. How do you think my business survive and be there for you when you want to come back next time? This is a kind of attitude that turning the country in to Wal-mart country. Why do you thing visa and mc stat that merchant should be setting any minimum purchase? They all are about their own bottom line and the millions of dollars the executives are making every year... I don't think any of you doing anyone any better by being fucked from behind by big business. Plastic money is not free money and you will pay back it back eventually and might even cost you more money as well!!! Just get the facts before start hammering small business. 70% of American economy runs on small business!!! Not everyone works for Visa and MC. It shows how their commercial effective in brainwashing all the morons posted against small business and in fact even the person who wrote this article… As for me I stopped taking CC and my business didn’t go down a bit and I don’t have any plan to take it. You can take your business to the big sharks out there… BTW good luck reporting your small business, as one of you stated it above, none of this big CC companies cares about you little $5 you are winning about. They have a whole lot bigger fish to fry than listing to your sorry ass storey not been able to buy soda using your CC :)

Ricky

I must wonder does anyone really care about the small businesses. A few people wrote about them. But a few people also said basically screw them all, and report them all. Like does this country really want to be run totally on big brand stores. The local and small businesses provide jobs for people, and yet they get slammed for all sort of fees. No one ever realizes this until they own a business. Like I own a business and I understand what people are saying about the credit card minimums. But what should small businesses do to offset the costs? In today's economy it's hard to survive at all, and rude people are just making it that much worse. I try to be as polite as I can to every customer that walks through my doors but there's only so much you can do for people I suppose. I hate placing the credit card minimum of $10 but honestly with margins becoming smaller and smaller every year this is the only way we can offset losing tens of thousands of dollars yearly. So you might all want to go against the businesses, but there's only so much they can do. I understand the country should be completely fair to the consumers but what rights do the businesses get then. Is the goal to completely screw them over as well? Most people can use a credit card anywhere and it all comes down to being less of a hassle for them. But for small businesses that decision to pay with credit card instead of cash could easily be a major part of their livelihood.

Jonathan

Today I went into my local grocery store to make a small purcahse of only $4 bucks. Up until today I have never had a problem with making a small POS transaction using my MC debit card, but was told only moments ago that there is a $5 minimum. Is there a sign stating this anywhere? NO. I am a little "ticked" because I hardly ever carry cash. Technology and convenience has made it more practical to "swipe and go", so why is it that when I go to a local grocery store they are still operating as if we're living in the 1990s? I didn't know it was against merchant contract rules for businesses to charge a min., and most average people don't. I am glad I found this site, because I will be reporting the store. It's not like this is a small local "mom and pop" store. This is a major grocery store chain here in NYC....And I forgot to mention that the clerk suggested that I use their ATM to retrieve cash to make the purchase. Yeah right! Pay a $3 dollar fee using their ATM, and another $2 dollar fee by my bank for not using their ATM...That's $5 dollars to make a $4 purchase. This type of consumer rape is ridiculous. If consumers don't stand up and make a fuss about this, it will continue to happen.

rick

Forgot to mention my tactic at businesses i now experience this at. Last was a local Palo Alto shell gas station (which is always 25 cents higher per gallon anyway). I went in, grabbed a soda opened it & began drinking while the guy in front of me finished checking out. Get to the register & whip out the plastic. Guy points out his dumb little hand-scribbled sign. I tell him i dont have cash and never do. He looks dumb founded. I say then well i guess you'll have to take ur soda back then! He tells me i have to pay for it because i opened it. I hand him my credit card :) he looks at me like im deaf. I tell him his choices are clear... 1. Take the soda back and call it a loss for being an ass who cant read a merchant contract HE signed. 2. Take the credit card & call it a loss again for being an ass. -OR- 3. Call the police and waste his time explaining how he wants me to pay for something that i WANT to pay for but he refuses to accept a perfectly valid form of payment that he CLEARLY accepts but has to do it with regards to the contract he signed as a merchant...

This REALLY PISSES them off and its fun to watch the bastards stew over it with a shit ass grin on my face.

rick

Dont waste your time reporting anything to visa/mc. They really dont give two craps about you or your little corner store that could. How can i say this so sure of myself? 10 hand written letters, numerous pictures of a restaurant & their sign clearly stating "no CC purchases under $10" along with detailed business info - FOR THE PAST THREE YEARS. Guess what came of it? That's right... a big fat nothing. Sign is still there. Business name? "A Good Morning" located in mountain view, ca. I even posted a pic of their little "no CC under $10" on Yelp under their profile. Yelp removed it because they're a "premium yelp business member" (aka - pay yelp to keep ur business in a positive light). So yelp is a bunch of BS as well.

K

A small local grocery store where I grew up accepted credit and non-PIN debit payments. However, they posted a sign showing the amount of monthly credit card fees. It was very effective in getting people to use cash or a debit card with a PIN and they did not break their contract with the CC companies.

I feel for the merchants, but Visa and MC are in business for themselves, not the little guy. Either don't accept certain methods of payment or honor your contract. I rarely carry cash, so I've pushed this point often.

Rodney

My parents own a convenience store and for certain things, accepting a credit card is a loss for them. For example, people want to buy city trash bags from the store, which pays a commission of 5 cents. If a customer charges a credit card, my parents are charged 10 cents per transaction. There IS NO better deals. Yes, perhaps for big store chains like 7-11 but for a small grocery store owner there is no better option than paying 10 cents a transaction.

Maybe you should put yourself on the shoes of a store owner, and then decide if the big companies (visa, MC) are screwing over small grocery owners, or if grocery owners screwing over consumers. Visa and MC should perhaps do more to protect small businesses by reducing fees?

Eric

"I know of several "shady" shops that instead of charging a surcharge or enforcing a minimum, offer a "Cash/Debit Discount" which usually is around the cost of a credit transaction."

A cash discount IS allowed, however, processing using a debit card allows the merchant to impose a minimum purchase and / or fee.

I've been of the "i'll use my card wherever i damn well please" camp for quite awhile, but lately have softened up a bit due to reasons like what Jake said above me. Supporting small family run type shops are good for us all, but the merchant-links are taking more and more from their bottom line. I say, when shopping at mom and pop type stores, try pay with cash, even when inconvenient. Big box stores and the like, charge away.

MattyD

I know of several "shady" shops that instead of charging a surcharge or enforcing a minimum, offer a "Cash/Debit Discount" which usually is around the cost of a credit transaction.

I guess that's their way of bypassing such a policy without violating it ....

Jake

I am a business owner who is on the other side of this transaction. I sympathize with the customer who wants to or must pay be credit card, as I am often one of those customers.

That said, the merchant services companies (not the banks necessarily, and not Visa or MasterCard) are the bad guys here. Though M/C and Visa state no minimums or premiums as part of the agreement, the egregious nature of the "discount" fees the merchant services companies charge is ridiculous. For instance, not only is there a minimum fee for each transaction ($.25 is typical for a small business), they charge for each end-of-day settlement, and they take a variable percentage of the purchase. (Let's not talk about the monthly fees for paper statements or compliance fees or... they are worse than cellphone companies)

The variable part depends on the type of card, it could range from 1.5% to almost 5% of the transaction -- and the merchant never knows until he gets the bill! Those cash back cards? Higher. Check cards? Higher. The travel miles? Who do you think pays for the perks? Certainly not M/C or Visa or the issuing bank. Certainly not the merchant services company handling the clearing of it. It is the merchant in the form of a higher percentage of the purchase.

My brother runs a gas station and convenience store. He has a very attractive discount rate with his franchise's merchant services account, and he pays over $50,000 per year in credit card fees. My business is no where near that level of credit card transactions, but I feel it too.

When someone wants to buy something with a credit card that is under $15, we kindly ask them if they could pay cash instead. For some repeat customers we will process it regardless, for others we hold the payment until they have a bill that is a reasonable amount. No one has ever had a problem with our policy, and some welcome it. In the unusual case of someone needing to pay and we suspect we will not see them again, we negotiate with them to pay something extra to offset our costs of the transaction. They are happy to have been asked.

You may say that the 3-5% of a small transaction isn't very much and the business should be able to absorb that cost or raise prices to cover the cost of doing business. Both of these can be true, but in retail especially, margins are thin and getting thinner in a bad economy. Taxes only go up if you haven't noticed. Raising prices isn't usually an option, and there is less and less opportunity to absorb these small fees.

An honest merchant should state a reasonable policy up front, be willing to be flexible, and let the customer's attitude dictate how to handle a given situation. When asked about our policy, we use it as an opportunity to start a conversation. Usually the customer understands the reasoning and is willing to also be flexible. We have gained several loyal customers because of this attitude.

Steve

Very simple, report all those stingy fraudulent businessesto the BBB. Guaranteed, you will see results...

Steve

I've had a look, and can see all the information that points to mastercard/visa disallowing minimum charge etc in the USA. but I'm in the UK and can't find anything on their UK sites that say that - can anyone else?

chelsea

Visa's policy is difficult b/c they do ask you to file a form through the mail or write a letter. Mastercard has an online website to report the abuse (which, yes, does include adding a surcharge to credit cards): http://www.mastercard.com/us/personal/en/contactus/merchantviolations.html.

While you won't hear back from them, the times I've reported a merchant, next time I visited the store the policy has changed. I typically only report if the policy is egregious (i.e. the restaurant whose entire lunch menu falls below their minimum requirement and makes us hit an ATM to pay for our orders) or they refuse my card after I tell them it violates the card's policy.

Jason

I once took a picture of the sign requiring a minimum, a picture of the man behind the counter, and a picture of outside the store, then emailed them all to Visa with the name and address of the store.

Visa told me to contact the bank that issued my card to complain. They gave me a form to fill out, and I submitted it with all my evidence.

No idea what happened...

Amy

One of my favorite Thai restaurants in town has a $25 minimum policy, and it's ridiculous. If neither of us has cash, my husband and I end up ordering an appetizer and a drink to hit the minimum for a card.

Outlaw

"I'd love to believe this article, but without hard evidence it's hard to believe some random blogger -- no offense."

HA. No offense taken, man. Looks like you found your answer, though: VISA and MasterCard written merchant agreements both clearly state as such.

Although, to be safe, I also contacted all 4 credit card companies to get official comment on this matter to make sure I got my facts straight.

bob

How do you contact visa/mastercard/discover about this. The timing of this post is amazing. There is a BP gas station near me that i get gas at a lot, but sometimes i run in to get a snickers or something and i rarely carry cash, and i forget that inside teh store they have a BS minimum $5 to use a card. and I new cards don't allow this and I want to rat on them. Who do I contact about this?

Kevin

Report the store! We should all report the businesses that engage in this practice. Having said that, I'm not exactly sure what the most direct way of going about this is. Can someone help?

Colin

What about Maximum Purchases? A while back I was purchasing a new vehicle and wanted to get the points (I was doing a trade at the same time but it was still a large transaction easily within my credit limit), they would not let me use my credit card. A couple of months later, I noticed a signed on the wall which said nothing over $500 could be charged (this was in the dealership not the repair shop or service center).

Consumer

Me again, I did a quick search and found some results on visa.com which agree with your claim.

http://usa.visa.com/about_visa/ask_visa/index.html

and here's a link to the merchant agreement
http://usa.visa.com/download/merchants/rules_for_visa_merchants.pdf

Anonymous Commenter

I've only ever seen minimums around $2. Not worth the fight.

Consumer

Is there a link to the agreement credit card companies have businesses agree to, indicating what you're saying is true? I'd love to believe this article, but without hard evidence it's hard to believe some random blogger -- no offense.

Tristan

I have a question

I occasionally go to a standard issue Diner. They have a policy of marking up all credit card purchases by a percentage to offset the cost involved in processing. They have numerous signs around their building claiming that they spent quite a bit of money on credit processing and to keep prices low, they are implementing this policy. Their prices aren't that low...

Is this against the rules? Since minimum purchases seems to be, I would think that something like this is as well. This policy discourages credit card purchases at their establishment and would be seen as bad business for the Credit card company.

WorldlyBedouin

Yeah I refuse to shop at such stores. I'll go without the item(s) rather than cave into their nonsense.

Unfortunately as an Indian its RARE to find an Indian grocery store which doesn't have such a lame policy. Every chance I can, I seek to educate my fellow Indians. If they refuse to bend, I tell them that they've permanently lost my business and I'll be sure to tell others of their "business practices". I do this politely but the response from them 99% of the time is disinterest.

I didn't know that I could report these businesses to Visa, MC, or DC...but now that I do I believe I will start. Fair is fair, don't offer the payment option if you can't play by the rules.

Brad

when it comes to money talk. everyone needs to be assertive on this matter.

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