Credit Card minimum PURCHASE amounts

[darkwing_duck1]

Noticed how credit cards seem to be accepted just about everywhere now? Not too long ago, many fast food chains started accepting them even.

Well, there's a new twist/catch to that: minimum purchase amounts.

http://consumerist.com/2010/09/add-...that-allow-minimum-purchase-requirements.html

ALL the major card networks now give, or will be giving merchants the option to impose a minimum purchase amount before they allow you to swipe the plastic (currently $10). How many merchants do that currently I don't know.

It's also becoming more and more common for a merchant to require ID on all card transactions apparently.

 

[Gepard]

ALL the major card networks now give, or will be giving merchants the option to impose a minimum purchase amount before they allow you to swipe the plastic (currently $10). How many merchants do that currently I don't know.

It's also becoming more and more common for a merchant to require ID on all card transactions apparently.

Retailers have been doing both of those for quite some time now. They're not that inconvenient. I don't know why you're implying this is such a problem.

 

[darkwing_duck1]

^Really? I'd never even heard of such a thing. They don't do that in my part of the country (that I've seen). Around here, the trend is towards MORE acceptance of plastic, even for small purchases though I'm guessing that may change.

I suppose it's not bad to keep 10 bucks on you for small stuff at any one time, but it's a pain in the ass to have to go to the ATM for what used to be called "pocket money".

I'm reading more about this, and learning how the card companies are screwing merchants with rediculously high "per transaction" fees...you would think that a card company would want it's product used more, and therefore would want to keep fees to a minimum.

ETA: Someone posted this in a conversation about the underlying legislation that allows this. I can not vouch for it's accuracy, but it would be bad IMO if this came about:

Thanks Democrats for passing the Durbin amendment. By the end of the year ALL credit cards will be changing their merchant [rules] to allow FEES, To set their own Minimum and Maximum rules, and the govt will now be setting the fees merchants get charged per transaction. The solution... Carry more cash on you... Don't think so. Get ready for ATM FEES at all banks to make up for the money they are gonna lose from these rules. This is HORRIBLE for consumers.

 

[cultcross]

It's fairly standard here, especially among independent retailers. When you pay by card, the retailer incurs a fee that comes out of your purchase price, so their profit drops (this is how the card companies finance the provision of card payments, it's not a charitable setup). On a purchase below about £5, that fee will wipe out the profit completely on most items - independent or small shops can't usually afford to do it.
It is quite common to see "Credit/Debit Cards welcome over £5" or similar.

 

[Pingfah]

We have chip & pin, no need for ID.

 

[darkwing_duck1]

Interesting. So Mom and Pop's diner (or in your case pub) might impose a minimum because they have to make their margin, but a franchisee (McDonalds, for example) whose margins are much smaller (percentage wise) would be able to absorb that cost?

 

[Gepard]

^Pretty much. As an example, I've bought single items at the (franchised) 99 cent store with a credit card, but when I went to a locally-owned paintball arena I had to pay with cash for anything under $10. I'm pretty sure checking photo ID for credit cards is standing policy most places, it's just that most employees are too lazy to enforce it. I've only been asked for my license once within recent memory, and that was at a Wal-Mart by a checker who seemed pretty green; nobody else that that same store bothered.

Also, back when I was a kid, I do remember my parents occasionally being asked for picture ID when paying with credit cards, so that's been around for a while too.

 

[T'Girl]

It's also becoming more and more common for a merchant to require ID on all card transactions apparently.

On the back of my credit card, in the field for the signature, I've written in block letters "ASK FOR PHOTO ID." As one way to avoid identity thief I want them to ask.

As far as minimal purchase amounts, I only use my CC for large purchases, debit for everyday stuff. I don't even carry it most days, just when I know I'll need it.

 

[eastman23]

It's also becoming more and more common for a merchant to require ID on all card transactions apparently.

On the back of my credit card, in the field for the signature, I've written in block letters "ASK FOR PHOTO ID." As one way to avoid identity thief I want them to ask.

Same here.

Still, about a third to half the time, they don't ask.

 

[Jan]

Both credit and debit cards incur per-transaction charges for processing as well as a percentage taken by the card company. The higher the volume of transactions a merchant (or chain) has, the lower those charges might be.

Every once in a while the 'ask for ID' people may end up getting their card refused completely over that. The card issuer requires a signature and from time to time they send out reminders to the merchants that accepting an unsigned card could invalidate the protections a merchant has against chargebacks.

Jan

 

[Mr. Laser Beam]

What about VISA/MC debit cards? Does this apply to them as well?

 

[Robert Maxwell]

I've seen plenty of places in NY, NJ, and Indiana that have minimum purchase amounts. It's commonly small restaurants, low-margin stores (think dollar stores), and some convenience stores. I've seen minimums from $5-10.

But I believe that until this law was passed it was actually against most merchant agreements to have a minimum purchase amount. VISA and the like don't give a damn if your profit margin is hosed, they want their merchant fees and they don't want you gumming it up by saying "$10 minimum." So, while the minimum purchase amounts weren't technically allowed, it's not common knowledge and hardly anyone is going to go tattle to VISA or whoever.

I guess minimum purchase amounts are gonna wind up being standard.

 

[Peak]

Over here there is now illegal for merchants to take out a fee on the customer for card use, so I guess there will be a lot of smaller businesses who will refuse cards in the future (the banks still have their transaction charges of course).

The reasoning behind this is that it will be cheaper for the customer, not to have to pay 3 SEK extra when buying cigarettes or whatever. And this will help to lessen the amount of cash in circulation and, of course, the risk for robberies.

The true result will of course be that a lot of businesses won't take cards at all, and there will be a lot more cash in circulation...

I almost never uses cash anymore. Here there's no ID-requirement for use of cards (just chip + PIN-code).

 

[darkwing_duck1]

What about VISA/MC debit cards? Does this apply to them as well?

The current law exempts debit cards. That could (and knowing how things work probably will) change.

 

[Mr. Laser Beam]

^ No, I don't mean "pure" debit cards (i.e. ATM cards), I mean ones that have VISA or MC logos on them.

 

[darkwing_duck1]

^You actually took a RFID chip?

 

[Mr. Laser Beam]

You actually took a RFID chip?

I'm not following.

 

[Timby]

^ No, I don't mean "pure" debit cards (i.e. ATM cards), I mean ones that have VISA or MC logos on them.

If you process the transaction as a debit, it doesn't matter. If you process it as a credit transaction, then the minimum becomes a factor.

 

[TheBrew]

For small businesses, I make a point of using cash for smaller purchases to help them out a bit.

 

[Timby]

I do the same (or I process it as a debit, which doesn't cost the store anything).

I've told this story before, but at my last company, we had the capacity to process credit cards, but because we did so few, our per-transaction fee was massive -- eleven percent. After signing the local energy utility to a $25,000 advertising contract, we discovered that they wanted to pay with a company credit card.

Eleven percent of $25,000. Oh, hell no.