Can Merchants Require a Minimum Purchase for Credit Card Transactions?

Written by admin - 52 Comments

The short answer is that no, merchants cannot require a minimum purchase before accepting your credit card as payment. In fact, all major card issuers explicitly forbid this practice, as follows.

From Visa’s merchant contract:

Dollar Minimums and Maximums – Always honor valid Visa cards, in your acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts is a violation.

From MasterCard’s merchant contract:

The merchant must honor all valid MasterCard cards without discrimination when properly presented for payment. The merchant must maintain a policy that does not discriminate amount customers seeking to make purchase with a MasterCard card. A merchant that does not deal with the public at large (for example, a private club) is considered to comply with this rule if it honors MasterCard cards of cardholders that have purchasing privileges with the merchant.

From Discover’s merchant contract:

You may not require that any Cardmember make a minimum dollar purchase in order to use a Card and, other than when we have not authorized a Cardmember’s transaction, you may not limit the maximum amount that a Cardmember may spend when using a Card.

So there you have it. The next time a cashier tells you that your purchase has to total a certain amount before they can accept your credit card, you’ll know that they’re blowing smoke. Of course, there’s little you can do if they hold their ground — and most will, as they’ve likely been instructed by their boss that they’re not allowed to accept credit cards for purchases under a certain amount. In such cases, your only real recourse is to contact the card issuer and report the problem.

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Comments (scroll down to add your own):

  1. Of course the credit card companies forbid this — it cuts into their profits. Don’t the merchants have to pay a fee to the companies when they process a CC transaction? If the fee is, say, $0.50 and I just bought a $1 bagel, then the merchant loses 50% of every bagel sale to the CC company. I don’t know what the actual fees are, but I only ever see this restriction at small local businesses (like coffeeshops). I would never report them.

    Comment by Anca — Mar 12th 2008 @ 3:39 pm
  2. Businesses know what they are getting into when they sign up with merchant banks to accept credit cards, so I don’t feel bad for them at all. The fee is very likely more than offset by the additional business that they do because they accept credit cards. This is what businesses have to weigh when trying to decide whether to accept credit cards or not.

    Comment by MITBeta @ Don't Feed The Alligators — Mar 15th 2008 @ 11:25 am
  3. At the retail places I’ve worked, the credit card fees were percentages of the sale – and the longer you wait to “settle” the days balances with them, the higher the percentage. I think the restaurant I worked at paid an average of 3% across it’s 30 locations – it varied by store according to when they settled their daily balances.

    The two gas stations closest to my house have minimum purchase requirments inside (not at the pump). One is $3 and one is $5. I was very annoyed the day I ran in to grab a drink while I was running errands and they told me I had to add to my purchase. I didn’t, and I got the soda at my next stop.

    Comment by Deborah — Mar 18th 2008 @ 8:38 am
  4. The fees that merchants pay are nicely disclosed; but it depends on the type of transaction, merchant, and type of credit card used. You can check these “merchant interchange fees rate” at both Visa’s and Mastercard’s websites for the most updated fee tables. In general, it’s between 1-2% the purchase price, sometimes with an extra dime or quarter or two per transaction. American Express does not disclose their rates but have been known to be higher than visa or mastercard.

    Comment by Merchants — Mar 18th 2008 @ 8:52 am
  5. Credit card fees are a percentage of the transaction plus a monthly service charge.

    Where I work, we used to have a $5 minimum, but when management changed, that went away. My bosses reason for getting rid of it was “A percent is a percent.” Right now, the register I work sees over 100 transactions between 11 AM and 6:30 PM weekdays. This is up from previous years (along with overall business). We are a fast-paced college cafe & market location, often times with almost no room for customers to move during the peak meal times.

    I personally believe card companies specifying no limits is not their call, except within the context of “You can’t to save money.” We may eventually have to reimplement a minimum purchase in order to provide the level of customer service our customers have come to expect. This implementation would not be to save money, but to provide superior customer service.

    Comment by Nathan — Mar 18th 2008 @ 9:08 am
  6. THANK you. I always tell people this but they never believe me. From now on, I’m sending them this link.

    Comment by Kyle — Mar 18th 2008 @ 1:30 pm
  7. Visa and mastercard charge 1.5% whereas Discover and American express charge 3%, PLUS they’ll charge you a transaction fee of a few more cents. My friend is a gas station owner and when you look at the books it adds up. You can watch him cringe when someone busts out a credit card to buy a $1 soda or bag of chips. Some vendors actually charge an additional fee when people use a credit card, which makes sence to me. A local Jimmi Johns sub chain will charge you 50 cents.

    With the accessability of ATMs everywhere you shouldn’t need to use a credit card to make a $1-8 purchase and if you don’t have the cash for it in an account you propably shouldn’t be buying it.

    Comment by Zach — Mar 18th 2008 @ 2:46 pm
  8. Zach you’re right! And if they use a Visa Signature or Premium Credit card, the merchant pays alot. Nathan, you’re also right. I forgot about the monthly fees; however, those monthly fees go to the merchant processor company (usually the bank or third party where merchant account is setup.) On a related note, a few states also say it’s illegal to require customers to have a minimum purchase amount to use a credit card (but i forgot which states). In addition, the lowest fee-card is the debit card (when used as a pin– not signature based.)

    Comment by Merchants — Mar 19th 2008 @ 8:45 am
  9. As stated in the article, all the credit card issuers forbid a minimum purchase amount. However, there are quite a few merchants who enforce the store policy of a minimum purchase.

    This, of course, brings up the interesting conundrum: If you report the merchant to the Card Association (VISA, for example), VISA will tell you to refer to the issuing bank (like Washington Mutual or Bank of America) — the issuing bank doesn’t have the resources to do anything about it, and VISA, Mastercard, AmEx, and Discover really don’t care.

    The only real recourse is to take your business elsewhere. If you want to have some fun, though, tell the merchant that he’s breaching his contract with the Card Association and that you’re reporting him, and further that within 72 hours, he’ll be contacted by a Card Association staff member.


    Comment by billspaced — Mar 24th 2008 @ 7:22 pm
  10. I find it disturbing; in a time when we can send probes all over space, chat with people on the other side of the globe, and build walking robots, that we still use this archaic thing known as CASH! I hate the stuff. It’s bulky, smelly, dirty, and counterfeiting is a much larger problem for the government than identity theft is. For those small businesses that still prefer cash over credit…TOO BAD! GET WITH THE TIMES!! I think it’s adorable that you put your little “$10 minimum” signs up to stick it to the big bad credit companies, but we both know that you are going to eventually lose the fight. It’s economic evolution baby. Eventually everything will be wire transferred, and unless you small businesses accept it and adapt, you will become extinct like the dodo bird. How do you like me now?

    Comment by David — Jun 12th 2008 @ 12:19 pm
  11. the business accepts the credit companys agreement in the initial setting up of the ability to take cards and they breach that agreement when setting minimal charges stop sympathizing for someone who knew the rules prior and broke them, whether it sucks for the business or not is not the the issue, sure it can be a little harsh but busines is business and money is money, and they know the rules.

    Comment by alex — Jun 27th 2008 @ 12:27 am
  12. Well David, you obviously know nothing about running and MAINTAINING a business. If it weren’t for all the little “mom and pop” stores around, you would see the prices you are paying for “convenience” rise. Small businesses keep afloat by competing in the market with larger corporations so that you, the consumer, can get a fair price. Locally owned businesses are providing a service to the community while trying to make a living. You know nothing about ALL the other fees and loss of profit that these small businesses incur. For instance, paying by credit card at the gas pumps. There is no minimum that you can purchase. If the profit for a gallon of gas is a nickel and the fees (per transaction or by percent of the actual amount charged) are higher than that of a nickel, then where is the profit? How about it becomes a loss. I wonder how many of those per day they have? So small businesses have to make up for their loss somewhere and set some sort of standards. Ever thought about how much the credit card companies and the merchant processors are profiting off every cent you spend, not as easily said with small businesses. Businesses accept Credit cards as a courtesy to the consumer, to make the consumer’s life a little easier than having to stop at the bank and get cash every time they needed to buy something. If you complain about the little things in life, you’ll never get to the battles that actually have meaning.

    Comment by faith — Sep 4th 2008 @ 2:56 pm
  13. Nathan:
    You said “We may eventually have to reimplement a minimum purchase in order to provide the level of customer service our customers have come to expect.”

    Just don’t. The merchant agreement that you signed with the credit card company *explicitly prohibits* this, and anyway it’s poor customer service, so it defeats your purpose. If you can’t afford to accept credit cards, then by all means don’t — I think more merchants should realize that that’s a viable option.

    Everyone else:
    I have created a website to identify merchants that impose minimum purchase requirements in violation of their agreements. It’s available at http://minimumpurchase.livejournal.com — check it out!

    Comment by Marnen Laibow-Koser — Sep 19th 2008 @ 10:41 am
  14. It is interesting that the experiences that I have had were all with businesses and gas stations operated and/or owned by foreigners. I am not xenophobic, but it is most disheartening that so many people come to this once great nation and disrespect our laws. I did call VISA to report a local gas station that imposes a minimum $5.00 charge for purchases. The number is: 1-800-847-2911. They should not provide the option of using credit cards if they want to impose their own illegal rules. My advice to all who read this website is to report each and every merchant who imposes these minimum charges and follow up with VISA to see that they are fined.

    Comment by Matthew Pasalic — Oct 13th 2008 @ 8:24 pm
  15. In Regards to Faith’s comment on Sept 4th 2008 @ 2:56 pm:

    I work in a small business in Totowa, NJ. The fee really isn’t that much. We do not charge a minimum. Even if someone wants to charge 5 cents to their card. The rules are the rules. Everyone has to follow them, or have their card machines and privileges taken away.

    Comment by Steve — Oct 29th 2008 @ 12:19 am
  16. I am a small business owner. I own a bar and it costs a lot more than just fees to accept a credit card on small purchases such as one drink. It costs me in sales/customer service and supplies. First as far as supplies I have to pay for the rolls of paper and ink to print the charge slips (and if you think computer ink cartridges are expensive….). Also maintenance on the machine. Plus the phone line (which is also the main bar line). As far as sales and customer service, I am loosing money having a bartender tied up (plus the phone line)running a charge for one drink. It takes time away that she could be making and serving drinks. I know you’re probably thinking that you are a customer and if that was the only circumstance I would take cards for any amount but that is not how it works in this business. I get customers who want to pay by charge everytime they order a drink. When we have happy hour our drinks are $2.00 and under…therefore I have to pay a transaction fee and a % of the sale on each drink they order….along with the time consumption of my employee and the supplies etc. I come out in the RED. Other types of expenses to a small business owner like myself are ….. As a courteousy we let customers run tabs. We ask to hold a dr license or credit card for our protection. We have been burned so many times on walk-outs (they leave without paying their tabs). We check the cards expiration dates to be sure they are valid but we lose out when they are stolen or declined. The initial transaction goes through and they deposit part of the sale amount minus the many fees (transaction, % of the sale, plus more of a % on speciality cards ie. rewards, mileage etc.) into our account. Unless we can send in a valid charge receipt w/signature, If the card was stolen we get a charge-back where they deduct from our account the full amount of the sale plus another fee (so now we are out the sale amount plus all the fees), . Of course, there are no signatures if someone walks out since the card was stolen . If someone walks out on a card that ends up being declined, I lose the amount of the sale and still have to pay transaction fees even if the card is denied. Even if the person is still there and the card is declined and they say it’s impossible run it again; every time we run that same card we are charged another seperate additional transaction fee.This can cost (and has in my type of business) a lot of money, not only in fees but loss on sales to pay for my overhead (rent, salaries, electricity, water, etc) and the inventory (liquor, mixers, straws, etc.) plus I need money to get new inventory to be able to try to make money to cover my losses and fees. How am I supposed to survive? What is so bad about having a minimum charge or a service fee for under a certain amount when someone is using a charge card it helps me the small business owner. Would you rather we raise our prices?? Then everyone would be paying more just so people could charge a small amount on their cards. How fair is that?? I now have to pay a $5.00 delivery gas charge when I order my liquor or other supplies is that fair to me…but I didn’t change my prices, I eat that charge myself. Accepting charge cards is a courteousy that we pay for for our customer’s convenience; therefore why shouldn’t we be allowed to set a minimum on charges; instead of it costing us more money. We all know the major credit card companies make their money on the fees from businesses that accept them and from the consumer (which I also am) that uses their cards in fees and interest. So please stop going after the small business owners who are struggling to make a living and survive against these major companies that are gouging us which ever way we turn. Go after them not the small mom and pop businesses.

    Comment by business owner — Nov 13th 2008 @ 9:26 pm
  17. “Businesses know what they are getting into when they sign up with merchant banks to accept credit cards, so I don’t feel bad for them at all. The fee is very likely more than offset by the additional business that they do because they accept credit cards. This is what businesses have to weigh when trying to decide whether to accept credit cards or not.”


    Nonsense. You either accept credit cards or you will go out of business. It’s almost 2009 ya know. Thta’s just how it is – no ifs ands or buts. There is not a single business entity out there that ever has lasted more than a year while refusing to accept credit cards. It’s just a fact – that is also why the fees charged by the issuers to businesses are so high – because they have all bussiness operators by the sack – and everyone (’cept for a few mis-informed dreamers) know this.Period.

    Comment by Buubs — Nov 26th 2008 @ 5:32 am
  18. NO! NO! NO! Report It to you credit card company. I only have the link for Master Card. http://www.mastercard.com/us/p.....tions.html
    1800-300-3069. the real problem is that most credit card company and bank employess don’t know that it is an illegal practace so you have to dig deep when on the phone with them. Tell them that it is Usually under Miscellaneous and called a minimum maximum transaction. I called every credit card company that i have and only one of the 5 knew anything about it and that was HSBC Mastercard.

    Comment by Justin — Dec 2nd 2008 @ 3:54 pm
  19. A small business owner can’t charge a fee to a customer for a small sale paid by the credit card. But… there is a loophole! Nobody could stop that business owner if he/she’ll put a sign by the register saying “Our prices below $10 include $0.50 cash payment discount.” Nothing wrong: cash discount is not a fee!
    In this case if customer wants to charge $1 for the bagel, he/she should pay $1.50. If customer don’t bother to carry some cash in the pocket it should not punish a small business owner. Sorry, life is a two way road.

    Comment by Igor — Dec 11th 2008 @ 3:24 pm
  20. I have no sympathy for these business owners belly aching about the fees associated with credit cards. Just like paying the electric bill, or the water bill, business owners elect to use these credit instruments to increase business, but they are not happy that some transactions cost more proportionally than others. Tough.

    They want their cake and eat it too. Either accept the damn cards or not, there are no half-ways. I NEVER give my business to companies that play this game.

    Comment by ronjamin — Mar 18th 2009 @ 1:43 pm
  21. Is this different for other countries? I recently moved to Australia, and this practice (along with surcharges for credit card purchases) is rampant.

    Comment by Laurie — Apr 7th 2009 @ 5:40 am
  22. Smallbusiness owener -

    So you own a bar? What is your MARKUP on the liquor/drinks you charge for? I dont feel so bad for you when you make a nice profit when you charge between
    $3-$5 A DRINK. 42 shots in a half gallon… 42x$4 = $168 for a $20-$30 bottle…not a bad profit!!! so i dont see why you are chatrging a minuum @ 3% at the MAX!

    nice try in justifing your min. purchase though

    Comment by JC — Apr 12th 2009 @ 5:01 am
  23. I just purchased bananas in a local supermarket – total was $1.15. Cashier asked the young man bagging groceries if I was could a credit card for a $1.15 purchase – he said I could not use my credit card – he went on to say its been that way for the last 10 years – (the store has been there for only about 3 years). I asked to speak with the “Manager” and the cashier told me he was the Mgr. (I never saw him before – I often shop in this story). Such nonsense – I paid cash but will follow up with Sr Mgmt of the chain.

    Comment by MW — May 3rd 2009 @ 5:01 pm
  24. I tried to use my DEBIT card (which has a VISA logo on it) at a store while on vacation. I was told that I have to spend $10 in order to use m DEBIT card. If I hadn’t been purchasing a gift for someone I would have walked out and let her keep her $7 kitchen towel. Thank goodness I had cash on me!

    Comment by Steph — Jul 3rd 2009 @ 5:35 pm
  25. We have a quite a few local businesses that practice this cover charge for credit/debit card holders. It’s like some kind of currency racism/segragation. I will check the laws for my state. I’m glad I looked this up. Was tired of buying more than I needed. I hardly ever carry cash because cash can’t get replaced if robbed. Anyway, good luck consumers.

    Comment by RW — Jul 30th 2009 @ 6:35 pm
  26. Well I work for a small business and they have a minimum card purchase which is $5 they have been in business for 15yrs and there has only been one crazy lady that went off about not being able to pay $2.50, she rudely yelled at me & went a little crazy so here I told her “We refuse the right…” There are ways to talk to people and she obviously didn’t know a polite way. If you do NOT like how they run there business I’m sure she can consume else where. I don’t complain when gas is more expensive if paid with a credit card and if I don’t want to waste $10 on a minimum charge then some businesses also have ATM machines, are people also going to complain because the machine charges $2 to withdraw money? To me its simple you don’t like it don’t go back!
    For those who have small businesses and understand I’m glad we can help one another.
    Good Luck!

    Comment by EG — Oct 30th 2009 @ 12:18 pm
  27. Really nice information thank you for sharing it and good continuation!

    Comment by interest rates calculator — Jan 14th 2010 @ 6:29 pm
  28. Well, EG, I suppose honoring a legal contract is just one of the things you small business owners feel you’re above.

    Comment by Kyle — Feb 1st 2010 @ 2:17 am
  29. The big banks that issue credit cards employ heavy-handed strongarm tactics when dealing with merchants. Merchants have no realistic choice but to accept credit cards, so big banks take advantage of this. That the general populace (at least those that are responding here) is supporting big banks over small merchants is mind-boggling. That anybody thinks it is okay for the big banks to dictate sales terms to the merchant is mind-boggling.

    If we were talking about a straight percentage taken out per sale, things would be much more straightforward. 2% of a $1 sale is no big deal. Is 37% reasonable? Of course not, but merchants pay a minimum transaction fee plus the 2%, so small purchases now lose the merchant money. In businesses that have only small purchases, this is HUGE.

    It is not reasonable for GOVERNMENT to legislate how a business charges for their goods, except in a monopoly situation (power companies, cable companies, phone companies). So the few states that have laws forbidding surcharges for small credit purchases are out of line.

    We all decry the big banks’ terrible treatment of their “customers” when they charge outrageous fees for petty transgressions, or when they damn near bankrupt the country with their financial derivative investments and sub-prime loans, then take taxpayer monies to bail themselves out, all the while paying out bonuses to the very people that put them into what should have been bankruptcy, but we think it is okay for the big banks to dictate business practices to small merchants…

    Mind boggling.

    The big banks are the bad guys, folks. They profit from predatory practices, and their monopoly of the credit card industry gives them unwarranted power over the economy and small merchants.

    Carry around a $20 bill and be nice to the small merchant… we are just like you.

    Comment by BigBanksAreEvil — Feb 1st 2010 @ 3:11 am
  30. I’m a small business owner. If the sale is less than $5 I charge $1.00. Don’t like it? Go somewhere else, I refuse to be driven out of business because of unreasonable fees.

    So far, I haven’t seen anyone complain about spending $2 to $5 to take their own money out of an ATM.

    Comment by Stan — Feb 3rd 2010 @ 9:02 pm
  31. “Well, EG, I suppose honoring a legal contract is just one of the things you small business owners feel you’re above.
    Comment by Kyle — Feb 1st 2010 @ 2:17 am ”

    No kidding, huh? It’s amazing to hear these small business owners getting self-righteous and playing victim when they’re the ones breaching their contracts. No one forced them to accept credit cards. It’s their choice. So why do they take them? Because they know it’s in their best interest to. They get more business that way. But as someone else mentioned earlier, they want their cake, and eat it, too.

    As for “Faith” above claiming that if it weren’t for mom and pop stores, you’d see the price of convenience rise, what the heck are you talking about? Convenience stores always have higher prices than their bigger competitors. That’s why I limit what I buy at convenience stores. It’s part of capitalism. I can easily take my business elsewhere, to a convenience store that plays by the rules, or to a grocery store where the prices are lower. It’s as simple as that.

    That said, even after I found out it’s against their agreement, I always used to let it go whenever I see a minimum purchase requirement, b/c I do sympathize with smaller businesses, until one day, the lady behind the counter was rude to me. Then I pointed out the min. purchase requirement, and how there isn’t supposed to be one. Her expression said it all. She was speechless. She knew exactly what I was talking about. That’s when I put down what I was about to buy, and never went there again. I just finished reporting that store, along with another business that has a $20 min. purchase requirement, where they charge $6 for a Bud Light! I did not feel bad at all for reporting them.

    Comment by Michelle — Feb 25th 2010 @ 10:19 pm
  32. Not enough people even though this is against the terms of the merchants’ contract with the credit card issuers. In fact, I called one of my issuing banks, and the employee on the phone had no clue what I was talking about. She then asked her supervisor, who also thought it was within the merchants’ rights. In fact, most people don’t know, which is why it’s so common. It doesn’t get reported. The person I spoke with said it happens to her all the time, and if they weren’t allowed to do it, surely they wouldn’t, right? She then proceeded to “explain” to me that it is within their right not to accept credit cards at all (which is true), just like it’s within their right to set a min. purchase requirement. I then had to explain that while it is within their right not to accept credit cards period, IF in fact they do accept credit cards, then they can’t have a min. purchase requirement, per their contractual agreement. I could see I was getting nowhere with her (but she was very nice about it), so I told her to do a search on the internet when she gets home. She was so sure there was no rule against this practice because she sees it all the time. Do you see the irony? The fact that this type of breach of contract by merchants is so rampant helps to perpetuate it.

    The only way this will change is if enough people know the rules and take the time to report it! When I called one of the bigger banks (Chase), and Visa directly, those employees knew immediately what I was talking about. NY’s Better Business Bureau has good information, including contact info:


    Comment by Michelle — Feb 25th 2010 @ 10:39 pm
  33. I have found that if you refuse to buy the item you went in for, the clerk will give in. They would rather take that 0.25 to 0.50 cent charge than lose out on the whole order. People just need to refuse to be taken advantage of, because the store owner knows he/she is doing something illegal.

    Comment by MNLS — Mar 15th 2010 @ 12:04 pm
  34. “I’m a small business owner. If the sale is less than $5 I charge $1.00. Don’t like it? Go somewhere else, I refuse to be driven out of business because of unreasonable fees.

    So far, I haven’t seen anyone complain about spending $2 to $5 to take their own money out of an ATM.

    Comment by Stan — Feb 3rd 2010 @ 9:02 pm ”

    I DO go elsewhere and I do not conduct business with businesses that use this practice. Why? Because, I REFUSE to be “strong-armed” or driven to make a larger purchase than I want to because you dont like the agreement you entered into when you decided to take credit cards. Im glad your business is doing so well that you can afford to turn away paying customers, their families and future business from them, because you want to pass your cost of doing business on to your customers. So I Say to you ” dont like it? dont accept credit cards !! “

    Comment by Dave — Mar 30th 2010 @ 12:08 pm
  35. Stan, I agree! I too refused to be strong-armed into bogus fees.

    I have been frequenting this small restaurant in my neighborhood for over a year and would have been a life customer if it wasn’t for their “$10 minimum order for credit cards or $.50 fee policy” that the manager enforced as I ordered take out ($6.50). I tried to explain in a friendly manner about “customer relations” and how their minimum credit card policy was against the law here in California. The manager played dumb and tersely stated he would raise his menu prices if the policy was not in place. He continued to say that “nobody else had a problem with the policy”. This is exactly the kind of response that will cause customers to go elsewhere… and so I did.

    Comment by LHC — Mar 30th 2010 @ 10:07 pm
  36. There are many comments in here from people who do not own a business and have NO idea what it takes to own one. We’re not trying to strong arm you. We’re trying to survive. Most small business owners, myself included, are not rich and living in a million dollar home. We’re doing what we have a passion for and what comes with that is sometimes no income or very little income just to keep our business afloat. Credit card companies charge a percentage but ALSO an additional fee. You get a flat fee per swipe of the card plus additional fees for other miscellaneous things such as settling your credit card at the end of the night. By the way, the debit card, with a pin, is the least expensive credit card transaction ONLY if the transaction is larger. Pin transactions are usually just a flat fee without the percentage. But, the flat fee is higher than the fee we pay for non-pin transactions. The reason it’s less expensive is because on a large transaction you pay the .35 and that’s it, not the .25 plus a percentage. On a smaller transaction you’ve just cut into your profit.

    The issue with the small dollar amount is that it does eat into our profits. My products range from $3.00 to $40.00. If all I ever sold were $3.00 items and they were paid by credit card I’d be out of business. The only way to overcome that is to charge the customer more. Either way, I’m screwed because my customers won’t come back if they feel they’re being charged too much. Several of you think because we’re charging $5.00 for a beer we’re living high off the hog. It’s nonsense. You have no idea what it costs to run a business. Our prices are what they are so we can live meekly. It’s the franchises that are reaping in the extra cash, not the small businesses. We don’t get the price breaks like the larger places do because of all the volume they have. So, our profit is not as high as you think. You are more than likely off by a LOT! You should think about it for a while before you make comments about being strong armed. Take rent, for example. You can do some research on the web for commercial real estate. Just figure out the cost of rent for a small place, say 1,000 square feet (which restaurants usually are much larger). Now, add in utilities. I’m in a SMALL place and I pay $1,000 a month for electricity alone. Then there’s garbage removal ( a lot higher than residential removal). Then there’s payroll. Calculate what it takes to pay a handful of employees even at minimum wage. Don’t forget all the taxes we pay on our employee’s behalf. Now, include all the inventory we have on hand. Then there’s waste – that’s inevitable. Now think about all the fees we pay to the state, the federal government, the village and the local health department. Now, include fees that we get charged from our bank. Remember, it’s a business account so there are always fees. It’s not like a personal account. Now add in phone service and, most likely, internet service. Now calculate what it costs to advertise – something we MUST do to stay in business. Now, add up the cost of all those coupons that are redeemed. Then think about the maintenance of our business – cleaning service, furnace repair, roofing repair, window cleaning, landscaping, etc. I haven’t even gotten into the cost of all the equipment to run the business (freezers, gas pumps, computers, desks, plates, cups, tables, clothes racks, etc.). There’s there’s accountant fees because most of us can’t do our own tax returns. By the way, I’m not even close to listing all the things we pay for. But, start with this and see what number you come up with. Then take that number and double it because it’s always more than you think, always.

    One thing I do know is that MOST of my charges under $3.00 are from the younger generation. You know, the ones who feel they are entitled. I used to feel sorry for you because the economy is so bad and you guys are going to suffer with all the debt we are incurring right now. But, lately I’ve seen so many of you with bad attitudes that I don’t feel bad anymore. You have all the answers so I guess you’ll be able to figure out how to pay off all the debt even though you are putting all the small businesses out of business.

    It’s not about a “contract”. It’s about the attitude of consumers who feel like they should be able to do whatever they want without fully understanding the impact of what they are doing. What do you think it cost me to clean up my bathroom after someone came in, vomited all over the floors and walls and then left? You can’t even imagine the stories that happen like that all the time. When you pay for a beer you pay for ALL of that.

    As far as your feeling we’re breaking a contract. Does that mean you NEVER EVER go over the speed limit, even by 1 mile an hour? If so, than you are breaking your “contract” with your license through the state. Have you ever been late paying a credit card payment or been overdrawn on your bank account? If so, then you violated those contracts as well. Have you ever returned something to a store when you really shouldn’t have? If so, you’ve violated the receipt contract as well. If you are young than maybe none of this applies but it will some day.

    And one last thing, we don’t feel like we can afford to lose customers. It’s just that if we bent over backwards for everyone who complained about something we would not be in business. As an example, I check IDs for every credit card that is not signed. Almost everyone thanks me. But, I had a customer who complained profusely and said he would never come back. I had to say “Sorry! Nobody else has a problem with it” If this person goes elsewhere then I can’t fret about it and I have to move on getting other customers in the door. People complain about everything, even if it’s for their benefit.

    So, just keep all this in mind when you decide to make silly comments about small business owners.

    Comment by Debbie — May 17th 2010 @ 3:10 pm
  37. I was at a local bar and I ordered one 6 dollar drink. I ended up being charged a minimum fee of 10 dollars and a 2 dollar charge, which I can only assume was a surcharge for using a card. This business, like many others who charge a minimum, do not have it posted anywhere and the bartender did not tell me I would be charged such hefty fees to have a drink with my friends. Needless to say, I will be reporting this to both Bank of America and Visa.

    It would not have bothered me so much if they had told me that they would have a minimum or if it was posted anywhere. The way they handled it (not telling me about it until I was ready to go) comes across as extremely underhanded. If merchants are going to scam me, they should at least tell me about it ahead of time and give me a choice in the matter. I work in a copy center at a major retailer and I am not required to tell customers how much they are spending ahead of time, but I always do. If a customer thinks something is too expensive I would rather they take their business elsewhere or change their order than feel like I’ve mislead them. That leaves a bad impression on the customer and is extremely poor customer service.

    While things are difficult in this economy for everyone, especially small business owners, the simple fact is you are breaking the rules by charging a minimum. I am not sure if I am going to report every business I see but I will definitely be reporting the one I went to last night, and any other one that charges me a minimum without posting it or telling me in advance.

    Comment by Daryl — Jul 6th 2010 @ 1:24 pm
  38. Hi,
    I am so glad for this website. I went to a store in Newark, NJ the other day it was at least 100 degree weather and I wanted to purchase a bottle of water. I was denied the purchase because I wasn’t spending $5.00. I was offended by this and the young man behind the counter was very rude brushing me off. This was a Hispanic store in the community. This happens over and over again from Hispanic and Asian retailers. I would like to make a change. Can you tell me what I should do? Thanks.

    Comment by Annette Grace — Jul 27th 2010 @ 11:10 am
  39. Just an FYI, a new law was just passed saying it is now legal to require a minimum purchase. The white house administration agreed to a minimum of $10.00, not $5.00.

    As a business owner I would like to say that I am thankful for this. Visa/Mastercard has raised their rates 4 times in the past YEAR to business owners. To charge a bottle of water, or any item less than $5.00, is basically like me paying you to buy my product.

    I know those of you who are not business owners think we’re sitting back living high off the hog but it’s simply not the case. We get nickel and dimed every time we turn around.

    I’ve seen comments posted on here about how much profit some places make but you really don’t understand the math. If we make $4.00 off of a beer, how many beers do you think we need to sell in order to pay rent, which is easily in the many thousands. Not to mention our gas and electric bills. I have a very small shop and my electric bill alone is over $1,000 a month. Can you imagine what a large place has to pay? Now factor in the insurance we have to buy: business, worker’s comp, unemployment, etc. Don’t forget the fees we pay to our villages, states, health departments, etc. every year or every month of every quarter. Then factor in everything we have as a commercial business such as telephone and internet, etc. Because we are labeled “commercial” those charges are almost 4 times that of a household. I haven’t even gotten into payroll. Also, did you ever think about how much inventory a restaurant or a gas station has? Just think about it, add what you think it costs and see what that comes up to. It’s thousands upon thousands that we invest and sit on until the customer is ready to come in a buy.

    I am not complaining. It’s what we know we have to do to be a business owner. What I am saying is you shouldn’t be complaining either. Because, frankly, you just don’t get it.

    Comment by Debbie — Jul 27th 2010 @ 12:20 pm
  40. What is needed is a class action suit needs to be filed against all business owners who have broken the law. I don’t care what the expenses are, that is a part of being in business. Besides, business owners get enough write-offs from the gov’t already. How dare they rip off the consumers who keep them in business in the first place. I had someone write me and tell me that the law has changed. You would have thought that he would have posted where he got this info from. Nevertheless, those who are violating the law or who have in the past should be penalized for extortion and or blatant discrimination.

    Comment by Annette — Jul 27th 2010 @ 12:34 pm
  41. July 21, 2010

    You can read it here:

    And here is the paragraph…

    The bill includes an amendment that would require the Federal Reserve to set regulations resulting in “reasonable and proportional” interchange fees for debit cards. The amendment also bars the card industry from interfering with merchants who offer a discount or other benefit to customers who pay by cash, check or debit card rather than credit cards, and would allow merchants to set minimum purchase amounts of up to $10 for credit cards.

    And, again, you just don’t get it. Small businesses don’t get all those write offs. It’s the large corporations that do. I am speaking for the small business owners. The ones who cannot afford to pay you to charge a small item. Until you own a business you cannot know what it takes to run a business. Say all you want it’s part of owning a business until you know the facts your comments are disregarded by me.

    Comment by Debbie — Jul 27th 2010 @ 12:49 pm
  42. Debbie-
    As per the paragraph you referenced regarding the minimum purchase fees:
    “The bill includes an amendment that would require the Federal Reserve to set regulations resulting in “reasonable and proportional” interchange fees for debit cards. The amendment also bars the card industry from interfering with merchants who offer a discount or other benefit to customers who pay by cash, check or debit card rather than credit cards, and would allow merchants to set minimum purchase amounts of up to $10 for credit cards.”

    The minimum purchase amounts are for (pay close attention – key word here) CREDIT cards, and would not apply to debit cards.

    Comment by Christy — Aug 25th 2010 @ 10:36 am
  43. Christy, I am aware of the difference between credit cards and debit cards. What you may not be aware of is that small business owners, such as myself, don’t offer debit card payments because the way the transaction fees work for debit cards is different from credit cards and it would actually cost more to allow a pin transaction. A debit card transaction is a flat fee (transaction fee) and no percentage. A credit card transaction is a flat fee plus a percentage. A debit card transaction fee is much higher than the flat fee for a credit card, can be more than double. So, in a case where there’s a small purchase (a bottle of water) using a debit card may actually cost the business owner 50 cents or more where a credit card transaction may be 12 cents plus 2% or something like that. So, debt card purchases don’t help a business unless the transactions are larger. Additionally, even though you use a debit card, unless you actually type in your pin number, it’s being transacted as a credit card. In other words, every time you go to a restaurant you are using a credit card, not a debit card. So, that law would apply to everywhere a pin number transaction isn’t used. In the case of my business that would be every transaction because I don’t have a machine that offers pin number transactions. The point I make again to all of those that aren’t business owners, there’s more than meets the eye. I’m not complaining, as I mentioned, it’s part of being a business owner. But, I still feel like you shouldn’t complain either until you know all the facts. Most of what is mentioned here is that business owners, such as myself, make enough money on the prices we charge and I say again, it is simply not the case. I haven’t had a paycheck in 3 years. I do it because it’s my passion. What I disregard are comments made by people who don’t know the facts. Your point above may be the facts to a specific article but it doesn’t tell the whole story. My point in including that link was because someone didn’t believe it was true. But, for those who care to read this forum, when you use a credit card (or debit card) for a purchase under $10.00 it really is a hardship on the business. The young kids, unfortunately, are going to be dealing with this hardship when they get out in the world to work. If you want a nation with a thriving economy, where businesses aren’t closing their doors every 3 seconds, then stop taking the attitude that small business owners are living high off the hog and you are entitled to make them pay. Help the business owners. Get into conversations with them. You’ll be amazed at what you don’t know.

    Comment by Debbie — Aug 25th 2010 @ 12:28 pm
  44. How do companies that use high volume low prices operate? The IT industry deals with purchases that are several thousands of dollars with margins of 5%. Get hit with a 1.6% credit charge processing fee and now they are at 3.4% GP. Maybe it sounds small but consider a $100,000.00 deal. The company receives $3400.00 for the work they put into the sale and the credit card company receives $1600.00 for processing a transaction that costs them a $100.00 at the max. The credit card company made 1600% markup on that transaction. The business made 3.4%.

    OK say the company had the best rates in the world and visa only charged them .25% (thats right 1/4 of a percent). The company still owes the credit card company $250.00. So the retailer walks away with $4750.00 and the credit card company gets $250.00. How much work did the credit cards company do to make $250.00. How many transactions like this one are made per day?

    Simple math shows who is making money and who is not. If we accept the payments from credit cards we are at fault. If we unite and decide to make the rules they will fold to our requests. As cynics above stated just accept it and move on.

    What happened to supply and demand? Tell a customer they have to pay an additional charge of $1600.00 to process their order without hiding the fees and you customer would be irate to say the least. So how do cc companies get away with it? Simple, It is never disclosed to the consumer.

    Comment by id_unavailable — Dec 21st 2010 @ 9:47 am
  45. Why do people see this as a complicated issue? Step outside of the box.

    You know that spare change we all have at home, in our office drawers, in the ashtrays, glove boxes, consoles, etc., in our cars? Start keeping it all in your car. When a business requires a minimum on charge cards when they formerly did not, grab a handful of change and pay ‘em. Don’t be ridiculous and try to pay only in pennies or you’ll be SOL. Just, ok then, here you go. They get paid without credit card fees, you can get what you want without having to go to an ATM, write a check (who even does that anymore?) or even zero frustration. Also saves you a visit to one of those coinstar things and being charged a fee by them.

    In other words, make these purchases like we did when we were kids. With change.

    Comment by ItsNotComplicated — Jan 18th 2011 @ 3:09 am
  46. PS to the above:

    I live in Silicon Valley where no one carries cash. Yet everyone I know has a bunch of loose change, yep.

    Comment by ItsNotComplicated — Jan 18th 2011 @ 3:13 am
  47. New law says yes. Fresh after posting on whether small credit card charges are shameful or otherwise to be avoided, I got a comment on that post. “Paul” asks:

    “Wasn’t a provision of the financial reform bill that passed this July that store owners are now legally allowed to not accept a credit card charge for less than $10? I’m almost sure it was.”

    I hadn’t gotten wind of this at all, but I dug around to try to verify Paul’s claim.

    Sure enough, Paul got it. Payment card networks are no longer allowed to demand that merchants accept all payments, regardless of total amount. They can only demand that merchants accept all payments not less than $10.

    The bill Paul was referring to is HR 4173: Dodd-Frank Wall Street Reform and Consumer Protection Act, and was put into law on July 21st, 2010. Section 1075 of this law (beginning on page 693 of this printing of the new law) amends the Electronic Fund Transfer Act of 1978. The part that restricts payment networks as to the minimum charge they can force merchants to accept (which, up until about a month ago, was $0.01) is detailed in Section 920(b)(3)(A)(i)(II) of the amended EFT Act. Beginning with the amended section 920(b)(3) (page 698 of the new law, for those of you who are following along):

    directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability (i) of any person to set a minimum dollar value for the acceptance by that person of credit cards, to the extent that (I) such minimum dollar value does not differentiate between issuers or between payment card networks; and (II) such minimum dollar value does not exceed $10.00 …

    That is how the law is now. In the amended section 920(b)(3)(B), it further goes on to say that this amount may be increased under certain process. Meaning: There are avenues for making the allowed minimum greater, so down the road merchants could require $20, $30, or more before I can pull out my credit card.

    Comment by Ray — Mar 3rd 2011 @ 11:58 am
  48. Actually, there is no law. Merchants can set any minimum they choose. Yes, Visa and MasterCard can pull their terminals from a business, but there is no law in any state on paper or approved that does not allow merchants to set a minimum to use a credit card. Not in any state!

    Comment by Mike P — Jan 27th 2012 @ 12:46 am
  49. I just looked up the info on the Mastercard website and it does say that the up to $10 minimum is legal on the FAQ page. Must have been part of the help the little guy movement in Washington. I am still going to refuse to do business with stores that exercise this policy as i believe it to be anti-consumer.

    Comment by bt — Apr 14th 2012 @ 11:04 am
  50. Where as it is not acceptable under merchant agreement, it is not illegal to do so. Also several establishments will charge you extra to use a credit card (25-75 cents). They use this to defray credit card fees charge to them.

    Comment by Tom Lenoch — Jul 12th 2012 @ 5:08 pm
  51. I’m a cashier at a truck stop in a small town. the company owners only have ten stores, but from where I’m from that’s pretty good. but we have a $5 minimum to use any card. and that alone causes us to lose A LOT of customers who will drive next door to Pilots (our company is competitive with them in our town). if the office sees a credit charge for less than $5 it’s grounds for instant termination of our jobs. I hate losing business, but I can’t afford to lose my job over a $1.67 bottle of soda. I understand the company is charged, but if the wrong person comes in and sees the minimum our place can be shut down for up to a week or more for investigation because it is in fact against the law. you’d be amazed at how many times a day I hear quotes from laws that’s a mile long ab how illegal it is. but in my opinion, if you’re just getting a soda or a bag of chips and don’t have a few bucks cash, you don’t need the items. I myself won’t buy anything if I don’t plan on spending a whole $5+ if I don’t have any cash.

    Comment by cashier — Nov 6th 2012 @ 10:23 pm
  52. ?היי יש לי לקוחות חדשים בשבילך יכל לעניין אותך

    Comment by GALbodia — May 24th 2019 @ 8:00 am

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