The reason they do that is that the debit processing agreement does not prohibit a fee to the customer. The credit agreement does. They charge for what they can because they can. If you have a check card with a CC logo, see if they’ll process it as a CC, because then you won’t get dinged for the fee. If they accept any Visa or MC transactions, they are required to process it as a CC if that is what you prefer.
As to the rest of you, what stuyguy said. They entered this credit agreement freely, with eyes open, and they have to abide by it.
We’re having another CC discussion over here, so I’m gonna repost the contact info:
Off the top of my head, violations include minimum / maximum purchase limits, ID requirements other than the signed card, fees for card use, acceptance of unsigned cards, and requirements that check cards be processed on the debit network exclusively.
For the procedures that merchants are required to follow see here (PDF!) for Visa and here (PDF!) for MasterCard.
Well, there’s rules and then there’s rules. Being in the right on paper isn’t always the same as being right.
The rule in question is considered unreasonable by the great majority of merchants. They’ve dealt with it in the most expeditious manner, which is to ignore it. A variation on civil disobedience, if you will.
I figure the OP saves maybe a nickel by using his card. It costs the merchant maybe .40 on card related costs for him to use it. The OP buys a coffee there every day, saves a nickel a day. The merchant sells hundreds of cups a day, could incur hundreds of dollars in card costs each day for one-cup sales. So the OP would rather the merchant take a hit for maybe a thousand bucks a week so he can save a quarter per week.
We’ve all been consumers. Even merchants know what it’s like to patronize a store. We haven’t all been merchants. You try owning/running a store for a while and see if your perspective grows.
Why not implement a minimum purchase amount for all transactions. It will keep out the riff-raff who only want to buy a cup of coffee and drag down the margins of the shop. This is SOP for many parts supply companies.
I’m sure every business owner would like to have nothing but customers who place large orders, never bitch about the price, never make returns, and always pay their bills on time.
We aren’t whiny merchant apologists, we are people who support our local businesses. Companies like McDonald’s can make up for the losses in volume the way my favorite local places can’t. I think it is unfair for credit card companies to bend local businesses over a barrel like this and I bet their decisions were influenced by the large corporations their policies give the financial advantage to. So I am all for this bit of civil disobedience that allows local entrepreneurs to compete on the same playing field as the big guys and will help my city become a prosperous place.
That, and I don’t want to see my prices go up (or my credit-card no longer taken even when it is appropriate) because someone is scared he’s going to be robbed for the twenty in his pocket.
I’m in Australia, so YMMV, but here’s how things work out for me using a credit card vs ATM card (savings with a PIN) vs cash…
I have a visa debit card on my account. It accesses my savings, so I can only use it when I’ve got money in the account, but it acts like a visa card, with the Visa logo and purchase protection and all. Visa transactions are free through my bank (in fact, they promote using Visa vs EFTPOS). It’s not credit, so there’s no interest charged on purchases. The only cost to me is my normal savings account-keeping fee, which is only a couple of dollars a year.
I can also make an EFTPOS transaction, and select ‘savings’ on the machine. That also takes money from my account, but rather than signing for it I use my PIN. Because an EFTPOS savings transaction is processed the same as an account balance or cash withdrawl from a non-bank ATM, I get charged my account keeping fee, plus an ATM fee. Already I’m out more than I would have been had I used credit.
Getting cash out of an ATM, regardless of the amount, incurs similar charges. I get a handful of ‘free’ ATM transactions with my bank’s ATMs each month, then I’m charged a small fee for every transaction after that. I’m also charged $1-2 for any non-bank ATM transactions. Now I use public transport to get most places, and there’s a lot of occasions where an ATM for my bank is nowhere to be found, but one of the more prevalent ones like Commonwealth or ANZ or Westpac is. So often if I want cash I’ll have to just eat those charges.
Now I mostly use EFTPOS, because I hate signing my name, and I’d rather key in a pin. But I have performed an experiment in the past - if I put every transaction I do on ‘credit’ I save approximately 8-15 dollars a month. And over a year, that works out substantially cheaper to me than getting out money from the ATM or using a savings transaction
Yeah, but in the big picture, small purchases are an accepted trade-off. That sale of one pack of gum may not be the most desired, but it can be lived with.
When you factor in credit card usage on that small sale, the picture changes dramatically. Instead of making a small profit, you incur a small loss. Multiply by a large number of similar sales, and you have a big loss.
And it’s just not that hard for folks to have a few bucks in their pocket for such things. People don’t need to use a card for the little stuff, and the great majority of them can readily adapt to a small minimum limit on card usage.
Businesses don’t exist to lose money. The ones that lose money cease to exist. If absence of minimum limits are rigorously enforced, the consumer will end up paying for the costs involved. Be careful what you wish for, you might get it. You want the convenience of using the card for everything, you’ll pay for it.
Oh, come on. I challenge you to find any merchant who sells “hundreds of cups” of credit-charged coffee a day who isn’t racking up thousands of dollars in multi-dollar transactions a day at the same time!
I mean, you could apply this strained logic to all sorts of fanciful mecantile situations. I’ll bet it would not be too hard for a low-ticket cash purchaser at a diner to use up so many napkins, ketchup and sugar packets, hand soap, toilet paper, creamer, etc. so that the owner actually loses money on the customer visit. Heavens! Sure, it’s possible, and sure, it probably happens now and then, but the merchant knows that he will garner more good will by giving out endless napkins then by putting them in a vending machine. The same with credit cards. The store owner takes an infrequent hit with the promise of ultimately creating a larger and happier customer base. The merchants you’re defending want to have their cake and eat it too.
The problem with your analogy here, Stuyguy, is that merchants get to decide how many napkins they want to provide. There is nobody telling them “you must provide 500 napkins to each customer, be it for a wedding feast or a cup of coffee.”
No, they don’t; not really. Not in the diner scenario posed by stuyguy, anyway. Every diner I’ve ever been in, bar none, has had napkin dispensers at the table and/or counter. There is nothing stopping anyone from emptying the thing, if someone felt he needed that many, for whatever reason.
And nobody is telling them they must accept credit cards. They made that decision and therefore they should stick by the obligations of the contract they signed. And yes, if they had signed a 500-napkin-to-a-customer contract, I’d expect them to live up to that agreement too.
Does it matter how low the price is if you can’t physically pay for the thing? Who really gives a crap if the price of something is slightly higher? Of who gives a crap if a small business owner can’t manage his own business by accepting credit cards. It’s competition, supply, and demand. What’s the issue here? Are you the same people that claim that people that drive SUV’s are somehow robbing you of gasoline??? Or the same people that write a check for $3.00 in the express lane at the grocery?
The merchants have a choice as to whether or not they’ll accept credit cards. Consider this analogue – back before “pay at the pump” was so prevelant, there was a lot of industry fear that this would destroy sales inside the mini-stores. Well, it did in part, but everyone offers pay at the pump. Why do you suppose this is? Or McDonald’s or other fast food… now really: who doesn’t have $4.00 in their pocket for value meal? Apparently lots of people. Isn’t the use of cash just plain absurd when you have instant access to that cash via your credit card or ATM card?
Are we worried about the small merchants, is that it? Well consider that using a small merchant is the same as being charged for using a credit card. You’re paying for the convenience. Do you still go to work on horse? You’re paying for convenience. Gosh, there are literally thousands of examples. Welcome to the 21st century…
When you say ID Requirements, do you mean asking for ID if the sig isn’t good enough, or every time?
And Sierra, I assume you’re talking about Suncorp. I now have a visa debit with them, but even when I still had a savings card I barely ever racked up any fees. And the place I spend several hours a day 5 days a week doesn’t have a Suncorp ATM. I use the Visa debit every time anyway, just so there are no fees whatsoever. Unless of course I let my fiancee get money out for me, and he has a habit of not caring which ATM he is going to.
It’s not that hard to avoid fees with ATMs.
I just don’t get this. I understand it’s really, really hard to be a successful merchant, especially a small one. But as a merchant, you HAVE TO understand that there is this concept called “economies of scale.” Bigger merchants get bigger discounts from wholesalers because they move larger quantities of merchandise. Anytime in this world that you buy more of something at once, you generally get a better price. This is the same for household groceries as it is for credit card processing services.
This is like complaining that you should only be required to pay the per-volume cost of the economy-size mayonnaise tub when you buy the 8-oz jar … because, after all, your family is small and there’s no way that you can finish an economy-size tub. Too bad. That’s economics 101.
Actually, I’ve read quite recently that more of the big franchise fast food places are dispensing napkins, ketchup, plastic utensils, etc., from behind the counter rather than leaving them out in the dining area to cut down on the very losses that you mention. When low price is a driving force and profit margins are slim, companies do have to watch ALL losses. They add up the same way the OP’s saved nickels add up.
Since they make a per-transaction fee, they stand to make more money when more credit card transactions are made per account… when more credit card transactions are made, period. Since vendors have stronger reasons for wanting to incur fees only for larger transactions, they use the fact that vendors need to play ball with them to offer CC payment to make sure that they have the opportunity to get as many fees as possible.
Also, CC companies make their reputation on customer convenience… the idea that you can walk into one out of X million many stores (or go online, etcetera,) and pay by credit card for anything you want. If a customer can’t put for that $1 stick of gum on his Plastercard, then it becomes a slightly less valuable means of payment in general.
It looks like pretty much all of their rules are geared towards getting consumers used to ALWAYS being able to pay credit at shops that display the credit card issuer’s logo.
Same would go for taking debit cards the same as you take credit cards, and permitting all merchandise to be paid for via credit cards.
Becasue, realalisitcly, a modern business needs to accept credit cards to stay afloat. The credit cards want to maximize their profit and forcing them to be available to all transactions increases their profit.
Well, the idea of the contract as such is universal acceptance. This does support the credit companies’ bottom lines, of course, but the real consumer benefit (if you’re a smart user and not a debt-incurrer) is universal acceptance. Look at Discover and to a certain extent American Express.
I wonder, though, if the credit card companies have examined the possibility of not requiring the fixed fee (the non-discount or percentage portion) for transactions under a certain dollar amount. The “no credit cards less than $x” is very prevelant, although I’ve never had a problem trying – it just discourages a lot of people. It would certainly increase credit card usage for the morning coffee and bagel if stores didn’t have this policy posted (whether enforced or not). Overall the percentage commission could be higher than the fixed fee for this micro-transactions – which is another thing in and of itself in the history of the internet; see “micropayments.” I still wonder if Apple loses out big time every single time I purchase a single track for $0.99.
I have a question about merchant agreements of my own: do they typically reflect the service side of an auto dealer as being apart from the sales side? I’ve had occasion four times in my life where the fsck’ing dealer “doesn’t accept credit cards” whereas clearly they do accept credit cards, at least in Service and Parts.