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When is Minimum Billing Allowed?

May 9th, 2007

Last week my family and I celebrated the good weather with an afternoon barbecue. We had everything you could possibly imagine: potato salad, ketchup, hotdogs, burgers, buns, onions, relish, chips, brownies, soda, beer, you name it. We were prepared for some serious grilling. Only one problem. There were no matches. Anywhere.

Seeing that hungry glint in my kids eyes, I literally ran to our local convenience store just down the street and found a display of lighters right next to the check-out counter. The guy behind the counter rang me up and said that’ll be 99 cents, please?. Before I had time to catch my breath, I realized that there was no cash in my wallet. I’d spent it all at the grocery just a few hours earlier.

Feeling totally ashamed, I pulled my Visa out and handed it to the cashier. You should have seen the look he gave me. He didn’t even reach for the card. Sorry buddy, 5 bucks minimum for credit cards, he said (a little too smugly).

OK, I know charging a 99 cent purchase is a little ridiculous, but it was an emergency! By now a line was forming behind me and I REALLY needed that lighter. So rather than arguing, I grabbed 2 copies of People magazine, shut up, and paid the man.

Does this situation sound familiar? As a customer, it’s a hassle to add on items we don’t want in order to pay for the ones we need. We feel like we’re being taken advantage of (who charges $3.99 for a stupid magazine anyway!) As a merchant, it’s a hassle to charge single items like gum and bottles of water to a credit card. These types of transactions end up costing the merchant more than the item is worth because of interchange rates, etc.

Despite the hassle, merchants are not allowed to restrict their customers with minimum or maximum limits for credit card sales. Customers like me might put up with a $5 minimum on credit cards sign at the register, but all it takes is one customer who knows the rules (and has time to argue) and you will hear from your credit card processor. Here is an excerpt right from Visa’s web site:

Protection from Minimum Charge: Visa merchants are not permitted to establish minimum transaction amounts or charge cardholders a fee when they choose to use their Visa card, even on sale items. Cardholders encountering this problem should notify their card issuer to document and file their complaint. The card issuer’s address will appear on their Visa statement and may also appear on the back of the card itself.

Continued violation of this rule and many other rules like these will result in unnecessary fines and termination of your merchant contract. If you are placed on the Terminated Merchant File list you may never be able to accept credit cards again. So for your own sake, get rid of those minimum purchase signs and don’t restrict your customers or you may end up in serious trouble. Besides, you’re in business to satisfy your customers so they return to you and NOT your competitor who accepts credit cards with a smile every time.

Entry Filed under: Rules and Regulations

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