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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