If a merchant refuses to accept credit cards for small amounts but accepts credit card for large amounts, is it a breach of contract the merchant has with the credit card company ? Does the customer has any recourse ?
It used to be that it was a violation of Visa’s agreement. I think Master Card allowed it. Since I looked into it, laws have changed:
Your recourse is to shop somewhere else that doesn’t have a minimum purchase requirement.
By law, a merchant must accept a credit card for any amount if it is a credit card the merchant accepts. Sorry, I don’t have a cite off-hand.
There isn’t anything you can do other than report them to your credit card company. If they get enough complaints, they may take action against the merchant provided their is an actual breach of contract. That still won’t help you with that $9 worth of candy you want to buy today though. The merchant doesn’t have to sell you anything if they don’t want to.
As quoted above this is no longer true.
Yeah, the law changed and it doesn’t really matter, as there was jack shit you could do but shop elsewhere.
Errata: I think, before the laws changed, Master Card did not allow minimums and Visa did. I got it backward.
In any case, it’s moot now.
They have backed waay off on this lately. You will also see alot of places that will not accept credit but will take pin debit. At my shop for example a pin debit costs me $0.35 flat. A CC transaction is 2%+$0.35. On a $1000 computer the difference is $20 in my cost and its harder to challenge a pin debit in the event a customer feels a chargeback is an appropriate response when his favorite solitaire game wont run in Win7 64bit. Multiply that by 8-10 computers a month and those CC charges start to look like more of my paycheck than I like to share.
Tell the merchant you’re taking your business to someone that actually wants your money. If enough people do that they’ll get the idea.
Small merchants are not getting your money when you make tiny purchases of small margin items. They are way better off without customers that insist on it.
If you want to support easy access to reasonably priced goods, stick it to the banks instead.
Also note that starting last month retailers can impose a surcharge for credit card purchases (although state laws may prevent the surcharge, particularly in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas). See this page from Visa about the issue.
And even in those states, discounts for cash payments may be permitted.
Most gas stations around here (CT) have gone back to cash/credit differences in prices. This happened long before January 27th. I suppose since both prices are listed it may be considered a cash discount rather than a credit surcharge?
I’m not sure how to stick it to a bank, but if merchants are now allowed not to accept credit cards for small purchases, what would be a good solution for how I could buy a hot dog without a pocket full of stupid dollar bills and coins. It would be better for me if they’d charge me the 35 cents rather than refusing to serve food and making me go find some place that does want my money.
Use a debit card.
When using my debit card I’m frequently asked “debit or credit?” - there is no difference on my end in how they run it but I always say “debit”, assuming that means lower fees for the merchant (and theoretically lower prices for me) - is my assumption correct?
I could understand if a credit card company made it part of the contract that the vendor has to accept all purchases made with that credit card. (And it’s clear that this has changed).
What I don’t get is: there was a law about this? A vendor can choose to accept or decline any form of payment in any combination, as long as its clearly stated which forms of payment are acceptable.
Isn’t this just a simple case of contract law?
In July of 2012, Visa and Mastercard settled a class action lawsuit brought against them by a bunch of merchants alleging that the swipe fees represented a violation of the Sherman Anti-trust Act. A part of this settlement was that they could no longer restrict merchants from passing these fees onto the customer or setting minimum purchase limits.
The credit card companies could solve the problem for consumers if they wanted by eliminating fees on small charges, or making them much smaller. We run almost all of our expenses through a business credit card and pay it at the end of each month with no annual fee and no interest. Plus it gets us free checking and other free stuff AND it seems ever couple months we get another $100 cash for reward points. Obviously the cost of that is being levied elsewhere, mainly on the businesses that take the card. So those businesses have to push back, I understand that. Our business does not accept plastic of any kind.
When asked “credit or debit?” my answer depends on the kind of business, and how much I care about supporting them.
A small merchant that I would like to support, like the family-owned kennel we board our doggie at (it would bum me out if they went out of business), I ask them which is best for them. The answer is usually debit, so that’s what I do.
If it’s a big retailer (Best Buy, Macys, etc) I usually debit, but that’s just because I find it easier.
I have no problem with a merchant refusing to swipe my card for less than $10, as long as I know about it before I get all jiggy to buy something. Put a sign on the door, and I’ll deal with it.
Years ago, I worked with a company that opened up two holiday kiosks in local malls, and they did the opposite (kinda) end of the spectrum. ALL transactions had to be credit card or check, they did not accept cash. Just didn’t want the hassle of cash drawers, making change, etc. Perfectly legal, as long as we had a sign up.