In this thread, there was a customer service type problem of (surprise) Denny’s involving a credit card. One poster suggested that the restaurant could obligate you to pay up in cash, instead.
So I was wondering, if a restaurant has a sign up that says VISA or AMEX or whatever accepted, do they have to accept that form of payment? Could they decide they’d rather not on Tuesdays? Or if it’s not as convenient or quick for them could they insist on cash? What if their card machine broke?
PC
I’ve worked in retail, among other industries and all the places I worked at that had such signs did always take the cards listed, but usually not others. As for the card machine breaking down, it happens, and all places that accept cards have phone numbers to call for a voice authorization and procedures for manually processing credit card purchases. Whether the signs legally require the store to take those cards as payment, I am unsure, but I would guess yes.
I believe the posting of the signs obligates the merchant to abide by the credit-card company’s guidelines. I also believe that the refusal to accept a valid card for any purchase is in violation of the merchant agreement.
Credit card companies do not like the merchants setting their own rules for card acceptance.
The great one sort of touched on this subject in this column:
http://www.straightdope.com/classics/a2_352b.html
I quote:
So no, the merchant doesn’t have to ever accept your credit card if they don’t want to even if they say they will.
Of course, if they do say they will on a sign and they don’t, you could possibly get them under false advertising but I think you’d be pushing it.
And, going by the rest of the OP in the thread referred to in this thread’s OP, no merchant is obligated at all to accept a credit card which has been declined by the issuing agency.
A few times I’ve been asked to pay by cash at restaurants where their credit card swiping machines were out of order. Or when the magnetic strip on my card was acting up.
One had a sign posted saying that they couldn’t accept credit cards on that day due to the faulty swiping machine.
Between them, DrFidelius and xash pretty much sum things up.
There’s a legal requirement, but that requirement is founded in the contract between the merchant and card issuer.
The merchant is due payment for the goods or services. If the card doesn’t work (for whatever reason), you still have to pay. You should probably request that the merchant use the phone rather than the machine, as Q.E.D. suggested, in case that the fault is with their machine rather than your card.
But if the merchant said, “I don’t want the card, I want cash”, I don’t think they’d have a leg to stand on. They call the police, the police say “hey, the guy’s offering payment”. You call the card company, they say “accept or we’ll withdraw your merchant status”.
In the case that merchant status had already been withdrawn, but the merchant still displayed signage stating that they’d accept the card, then it gets a bit murkier. You’d still have to pay for the goods or services, just as in the case where the card didn’t work. But you might have a cause of action against the merchant for falsely dispaying the sign saying that they accepted the card. The card issuer might chase them up as well.
Speaking as a lawyer, but as one who has never dealt with this problem specifically, here is a guess (but not a wild ass guess):
The sign would probably be construed by a court as an advertisment.
Advertisements are invitations to trade. They are not contracts, and ordinarily (there are exceptions) are not thought to parts of a contract.
This would lead to the conclusion that no, the business is not absolutely required to accept a credit card.
Certainly one would not expect a business to be obliged to accept a card if it was declined by the issuer. In effect, then, from the start a sign saying that credit cards are accepted is practically read as “credit cards are accepted–sort of”.
Possibly a business could be held liable for false advertising if it did not honor cards, but this is a separate issue. So too a business could incur liability if it were shown, say, that it had a policy of not accepting credit cards from African-Americans, but id accept them from other people.
Once I went to use my American Express card to pay at a Salon that had a sign saying they accepted Amex, MC and Visa. The girl at the register told me they only accepted Amex if you did not have a MC or Visa because the percentage the merchants were charged was higher on Amex than on the other cards.
When I returned home, I telephoned the good people at Amex and made a complaint. What Amex told me was that if they are an Amex merchant then they are required to accept an Amex card that has been properly authorized. There is no such thing as a minimum purchase required to use the card or that it must be a card of last resort blah blah
Amex did telephone the merchant and made this quite clear to them. The Salon telephoned me with an apology.
That sounds like a contractual obligation that must be fulfilled… but my point is that there is no law on the books that requires merchants to accept your credit card.