No Minimum Credit or Debt Card Transactions
Mon, Sep 28, 2009
Our family never carries cash. Nope, it’s rare for my wife and I to carry any cash unless we know we specifically we have to have it for such expenditures as toll highways. Cash is always a second thought. Many times its required us to leave an activity or event, after finding out we needed cash, to find a nearby ATM.
We use our debit card and occasionally a credit card to make all purchases. So as you can probably imagine, it’s not uncommon for us to make some small purchases on the cards from time to time. We get a receipt for every purchase. As the family money manager, it’s easy for me to track expenditures with having all the receipts from purchases.
Minimum transaction amounts
Every now and then I come across merchants who have told me that they won’t accept my purchase because it has to be a minimum transaction amount. Most of the time, I’ve turned around and put my small item(s) back on the shelf and walked away in frustration. But I recently found out merchants aren’t supposed to set minimum transaction amounts.
In fact, I decided to do a little bit of research with two major credit card companies. I found each of their merchant rules on the Internet. Within each document I found where both companies plainly state that the merchant may not require a minimum credit or debit card transaction amount.
Mastercard merchant rules
A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.
Visa merchant rules
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.
Why do merchants do this if it violates the agreement with the credit card companies? The merchants are charged a processing fee from the credit card company. Therefore, they set the minimum purchase amounts to cover their expense and still make a profit. And some merchants are ignorant of the rules. The end result is inconvenience to the consumer.
How to deal with minimum transaction amounts
If you’ve experienced this frustrating situation like me, there are a few things you can consider in dealing with the issue.
1. We can start carrying enough cash to cover these small purchases. I don’t think I’m quite ready to go there yet. I find when I carry small amounts of cash ($10 or less) I tend to spend more money. It quickly disappears.
2. We can report the merchant to the credit card company. While this might solve the problem, must people won’t take the time. I guess if I’m not willing to report it, maybe the problem isn’t painful enough for me.
3. We can kindly remind the vendor they cannot set a minimum transaction amount. I’ve been ignorant of the rules in the past, so I might consider the friendly reminder next time. Perhaps some will correct themselves, but the great majority may not.
4. We can add an item or enough to meet the minimum amount. This isn’t a great option in my opinion. It results in me spending more money and it also results in unplanned purchases.
5. Finally, we can choose to walk away and take our business elsewhere. After number 3, this might be the best option, in my opinion. Ultimately, it’s lost consumer business for that purchase, but more importantly, the repeat business will be lost for the merchant. And over time, the repeat business is where the merchant will lose the most money.
Have you encountered minimum transaction requirements by merchants? If so, how did you handle the situation?
Photo by Ohadweb.
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Tags: Credit Cards
Agreed! The only time I have cash is when I pay for a meal and others with me give me cash to cover their portion. I did get stuck in Denver trying to get a cab with no cash…didn’t even occur to me that not all cabbies are able to accept credit cards for the fares. lol
Always good to see your posts. Have you used TweetDeck yet?
Jimmy´s last blog ..Return of Rome…
Jimmy, I will note we keep every receipt to make sure we’re tracking expenses accurately. I guess this makes my small debit card purchases more challenging as I describe in this post.
I’m not on TweekDeck yet, but do plan to start using it soon. Thanks for commenting and good to hear from you.
It might be possible that the merchant is actually losing money by taking small purchases. Although you might be within your rights to insist they accept your card for a small purchase, it might be considered a little selfish to ask the merchant to lose money just so we do not have to carry cash.
Terry Austin´s last blog ..Stewardship Is Who We Are, Not What We Do
Hi Terry. I guess at the end of the day it’s up to the merchant on how they want to approach business. I can’t say I would increase my purchase to spend up to their minimum and I may not have cash. My theory, which is difficult to prove, is it doesn’t impact their bottom line much in comparison to losing business to people. Unfortunately, we both lose. I don’t get my item out of convenience and there is lost business. I do appreciate your perspective on this and will definitely consider it if I encounter this situation again.
From another perspective, I am a merchant who follows the “no minimum transaction amount” rule. My main competitor in our small town does not. It therefore gives my competitor an unfair advantage over my business since I am paying fees on small purchases that they don’t. My options are to potentially start a fued by approaching the owner face-to-face to request they follow the rules(not a good idea in a small town) or to report them to the bank. Either way, it puts the onus on me rather than credit card companies to enforce their own rules.
Cindy, thanks so much for sharing your perspective. To be honest, I was so focused on writing about the consumer perspective and businesses not following the rules that I never thought about someone commenting who is handling this in the right way. I hope in the long run people somehow come to see your honorable conduct and reward you for it in repeat business – thank you. Could you negotiate the fees with the credit card organizations? Just curious to know if you think this worth pursuing with them.
I like to carry cash but I rarely use it unless I have to because I try to use my cash back credit card.
Credit Card Chaser´s last blog ..Credit Cards & Bankruptcy: A Visual Tragedy