I see a lot of merchants proudly displaying min CC amounts of $5, $10 or even $15 dollars - I have always thought this was absurd, and now I see it also appears to be against their merchant agreement with the CC company. I want to report these SOB’s, either they should accept them for all or not at all (I’m fine with that also).
As for why I want to charge my cup of joe, well using my CC is considerably cheaper to me then cash, as well as automatically categorizing my purchases.
You can report stores over here.
Keep in mind that stores set minimums because it cost them money to process a card. If the price is low enough then they actually lose money. This mostly affects small store owners and not big corporations. By reporting these stores you would probably succeed in doing nothing but ruin your average Joe’s profit for your convenience.
WAG Report it to the CC Co by phone and/or in writing and demand an explanation.
How is the use of a CC cheaper than cash?
You maintain records in that extreme detail? Why?
Actually, what he’d really be doing is forcing the businesses he frequents to raise their prices to account for the CC transaction fee. Really fucking smart, eh?
My WAG, he’s the type of person who withdraws cash from ATMs in small amounts. Service charges and ATM fees adding up. Finding a better bank and/or carrying more cash is apparently much more of a hassle than tattling on stores he frequents.
Or force them to stop accepting credit cards.
Right. Or to discourage others from starting to accept credit cards to begin with.
We’ve been considering this lately. If we were to start accepting credit cards or to start asking for payment requests through PayPal, we would lose a percentage from each credit transaction, plus add some other fees to our business expenses.
So should we raise the prices for everyone who pays cash in order to make up for our cost to accept credit cards?
In our particular business, I don’t think accepting credit cards will increase our sales enough to justify the extra costs. For now, you wanna buy our product, it’s cash, check or money order.
The reason minimums are against policy is so that the cost of accepting CC’s is borne by the business, and not the customer. Theoretically, sales are higher when using a card. McDonald’s found this to be very true recently. I’m not saying it’s right.
An extra charge for using a CC is also forbidden, but not a “Cash Discount.”
Right. But most small business people aren’t McDonald’s.
We publish a (very) small periodical with local circulation. It’s distributed free. Our income is from businesses, and rarely private individuals, buying advertising. While some small business owners do make purchases with credit cards, virtually all of them also have checking accounts. In about five years, we’ve had maybe five or six customers ask if we accept credit cards. When they were told we don’t, they bought ads anyway and paid with checks.
Of course, they can’t go to the next corner and purchase a product identical to ours from another business. . .
I for one do think that slightly higher prices are worth it to me for universal acceptance of credit cards. Carrying cash does bring with it costs and risks that I generally try to avoid. Also, the costs associated with the business having cash on hand are passed along to all customers. Looking at one last option, many businesses that accept checks use VeriSign or some similar fraud prevention service. I’m sure that cost is distributed among all customers, not just those who write checks.
I’m dismayed that you seem to have gone out of your way to not even try to understand why some businesses have this policy, and automatically judge them as SOB’s with no clue as to their motives.
The main incentive for a business to accept credit cards is to make sales they might not make otherwise. Originally, and to a large extent still, this means large-ticket sales that exceed the amount most people would have available in their checking accounts. The businesses are willing to accept the fees for these transactions because the fees are a small percentage of the profit on the sale.
That percentage rises as the amount of sale, and correspondingly the amount of profit, goes down. When you get down to that $5 or 10 range, the amount of profit left after the fees is so small that the transaction is a net loser for the business. It’s not unreasonable for businesses to expect people to have five or ten bucks on them. It’s not unreasonable for businesses to not want to lose money on a transaction where the customer does not need the credit, nor even the convenience, from using a card. Hardly what I would call being a SOB.
Considerably cheaper than cash? How is using the card considerably cheaper than cash?
I’d like to add to that question. How do you pay your credit card bill?
(I’m not the OP, but I wanted to comment on this.)
Credit cards are incredibly convenient and they have a lot of advantages over cash, check, and debit cards (as long as you’re responsible and pay your balance on time):
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It can be cheaper if your card has some sort of rewards/cashback program. You can get a 1% to 5% discount on everything you buy, which does add up over time.
You don’t have to drive around looking for ATMs. You don’t have to pay ATM service charges for using an ATM that doesn’t belong to your bank.
You don’t have to pay ATM fees to merchants that charge them.
You don’t have to deal with the loose change that inevitably results from cash usage. I just have to carry one card instead of a dozen sheets of paper and a bunch of heavy metal coins.
You don’t have to waste time counting bills and coins. Just swipe ‘n’ sign.
You don’t have to reorder checks/carry a thick checkbook/waste time filling them out (even the electronic autofill ones are slower than credit cards).
You’re not liable for unauthorized charges. Carry around $100 in cash, and if you lose it, it’s gone forever. Carry around a credit card, and if you lose it, just call and get another card and have the unauthorized charges cleared.
Recordkeeping: Why not? It’s automatic. Instead of having to write down every purchase I make, record all my cash withdrawals, keep all my receipts, etc., I just log on to the website and see exactly where all my money went (which, I have to admit, isn’t something I always want to know :D)
With some credit cards, all your purchases are automatically eligible for things like a 90-day theft protection policy, a guaranteed return policy, and a free extended warranty. Or free travel insurance. Or chargebacks for merchants that rip you off.
You get to build your credit if you’re responsible, something you can’t really do with cash. (Of course, if you’re NOT responsible, you also get to ruin your credit and forever f’ up your life…)
When paying bills, you save in postage, envelope costs, and the time required to fill everything out and mail them.
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All of these things add up and credit cards end up being cheaper both in price and in convenience.
Personally, I don’t mind a minimum purchase amount as long as it’s reasonable. But hey, if it’s against the credit card merchant agreement, the OP has the right to report that.
My experience with credit card companies has been that they charge a percentage not a fixed fee, so selling small ticket items isn’t going to eat into profits any more than high ticket items.
My experience (at least with every merchant account I’ve had) is that they charge both: a flat fee of, say, 30 cents, and a percentage of the sale.
[QUOTE=Reply* It can be cheaper if your card has some sort of rewards/cashback program. You can get a 1% to 5% discount on everything you buy, which does add up over time.[/QUOTE]
That I’m aware of. I still want the OP to explain how the card is considerably cheaper than cash. Especially for a few dollar purchase.
Have you been a merchant? My experience is the same as Raza’s - they charge a percentage AND a per-transaction fee. By the time you get down to a few-dollar sale, the total fee percentage is a significant chunk of what the profit on that sale would have been.
Hmmm. Screwed up that coding. Let’s try again with separate replies:
That I’m aware of. I still want the OP to explain how the card is considerably cheaper than cash. Especially for a few dollar purchase.
Have you been a merchant? My experience is the same as Raza’s - they charge a percentage AND a per-transaction fee. By the time you get down to a few-dollar sale, the total fee percentage is a significant chunk of what the profit on that sale would have been.
Really? I think I’ve seen this somewhere but I can’t peg where.
I know I’ve seen places that impose an extra charge to use an ATM card. Taco Bell (at least in this area) comes to mind with an absurd $1.25 fee for an ATM card transaction. Like I’m going to pay $1.25 extra so I can pay for my $1.40 burrito!
Excuse me, but it is my understanding that the merchants have signed a contract saying they will abide by the rules of the CC companies which stipulate that can can set no minimum purchase prices. If merchants have a problem with the occassional low-price charger, they should not have entered into the arrangement in the first place. The OP is in the right, and all you whiney-merchant apologists should get off his back.