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Minimum credit card charges in PH establishments — Brooklynian

Minimum credit card charges in PH establishments

brookfetish
brookfetish
edited November -1 in Prospect Heights
Yesterday, Consumerist had a post about Visa vendors (in this case, the USPS) illegally requiring a minimum amount for credit card purchases (illegal = violation of the Visa/vendor agreement):

http://www.consumerist.com/consumer/minimum-charges/usps-violates-credit-card-merchant-agreements-220961.php

I began to think....

....how many PH businesses are violating their vendor agreement?

What can/should we do about it?

For the record, I can only think of one PH business where I've been required to spend a minimum amount for credit card purchases: Soda.

Comments

  • veggiequeen
    veggiequeen
    What about the business charging fees to cover credit card purchases? Say, $1 per transaction? Is that okay per their agreement?

    I've heard before that minimum purchases are against their agreements. But I haven't pushed the issue with the stores that ask for this. In my opinion it would be okay for them to ask for a minimum purchase, but not to require it.
  • brookfetish
    brookfetish
    Good question. Perhaps someone with a vendor agreement can weigh in here. sje? WhyFi (not sure if your wife does)?
  • ugarte
    ugarte
    Stores are not allowed to require minimum purchases or charge a fee for using credit cards. The credit card companies require this so that buyers don't use cash instead. If a store tries to get you to use a fee, tell them to stuff it or you will report them to Visa. I have no sympathy for shopkeepers here.

    On the other hand, while minimum charges are also illegal, I don't mind them as much. Visa takes a percentage of each transaction but also charges a minimum fee. On small charges the store can actually lose money by taking a credit card. Once again, the credit card company wants this to happen - they want credit and cash to become totally interchangeable in the minds of cardholders and can see a future where a lot of money is made from stores that get stuck running credit cards for a pack of gum.

    Don't stick it to the local guy who is trying to keep individual transactions profitable - you have much less to gain than he has to lose. (That said, there are probably "rat" programs where you can get miles or other rewards for reporting stores that require minimum purchases. If you're conscience allows you to f a local business in the a for a shiny object, do the research.)
  • sje
    sje
    My shop's minimum is $10 to use a debit or credit card. Below that amount, the percentage the bank and the cc transaction company take out cut too far into a profit margin to be worth it. I do believe that's standard, but am not sure if it's "official".

    In the agreement, it states you are NOT allowed to add a surcharge for using the card, however, about half of my wholesale vendors in the city add a 2% charge for using it, I've argued with them about it, too bad, it's commonly done. The markup on a wholesale item can be very small, a few dollars times 1000's can add up, so the 2% is meant to cover the transaction fees.

    If I can find my agreement, I'll answer any questions about this if I can. Have no idea where it is, though!
  • whyfi
    whyfi
    No minimum at Natural Heights.

    Grand Plaza (? - on WA bet. Park and Sterling) Liquor recently raised their $10 minimum to $20...
  • brookfetish
    brookfetish
    The only way I can see the transaction fees hurting a business is if small dollar transactions account for a majority of that business' sales...AND most people pay with plastic.

    sje - you don't have much under $10 in your store (I believe). I hardly see your restriction having much of an effect on any of your customers.

    However, let's take a look at Soda...

    If I want to pop in for happy hour and only have 1-4 of their $3 pints, I'd have to pay cash. Now, I'm not a cash guy. I never have been and probably never will be. So, I'm being told (illegally) that I HAVE to spend $15 if I want to use my preferred method of payment. Now, most of the time, especially on weekend evenings, I'd be inclined to spend much more than $15. I'm going to assume that is the case for most people...if only considering Soda's prices outside of happy hour. During happy hour, Soda's prices are so low, that I'd have to consume more than I intended in order to meet the "required" minimum for credit card charges.

    If Soda didn't take cards AT ALL, my loss. I'd understand that. But, they DO take cards. They just choose not to abide by their agreement with the card companies. Why? Because they feel it would seriously eat into their profits? I highly doubt that the majority of Soda's customers are low tab customers.

    Edit: I don't think Soda would be hurt the slightest if they started meeting the requirements of their credit card vendor agreements.
  • ugarte
    ugarte
    BrookFetish wrote: The only way I can see the transaction fees hurting a business is if small dollar transactions account for a majority of that business' sales...AND most people pay with plastic... If I want to pop in for happy hour and only have 1-4 of their $3 pints, I'd have to pay cash. ... They just choose not to abide by their agreement with the card companies. Why? Because they feel it would seriously eat into their profits? I highly doubt that the majority of Soda's customers are low tab customers.

    Edit: I don't think Soda would be hurt the slightest if they started meeting the requirements of their credit card vendor agreements.
    Nice of you to say so. You are basically asking Soda to give you a free beer everytime you feel like popping in for a happy hour beer. You may not think it is a free beer - it costs you $3 - but between the cost of the beer, the overhead for running a bar and the transaction fee you are sticking them with because you "aren't a cash person" it might as well be.

    Also, you get up to the minimum faster if you tip the server. :wink:
  • brookfetish
    brookfetish
    ugarte wrote: [quote=BrookFetish]The only way I can see the transaction fees hurting a business is if small dollar transactions account for a majority of that business' sales...AND most people pay with plastic... If I want to pop in for happy hour and only have 1-4 of their $3 pints, I'd have to pay cash. ... They just choose not to abide by their agreement with the card companies. Why? Because they feel it would seriously eat into their profits? I highly doubt that the majority of Soda's customers are low tab customers.

    Edit: I don't think Soda would be hurt the slightest if they started meeting the requirements of their credit card vendor agreements.
    Nice of you to say so. You are basically asking Soda to give you a free beer everytime you feel like popping in for a happy hour beer. You may not think it is a free beer - it costs you $3 - but between the cost of the beer, the overhead for running a bar and the transaction fee you are sticking them with because you "aren't a cash person" it might as well be.

    Also, you get up to the minimum faster if you tip the server. :wink:

    Quite frankly, that's not my problem. It's the cost of doing business. Figure that into the cost of running your happy hour promotion.

    The occasional low charge on a credit card is much better not getting any money from me - which is the case now.
  • sje
    sje
    Ok, look at it this way, you are engaging in special deal, you go through the slight inconvenience of paying cash, Soda pays no extra fees to anyone, you get a delicious cheap beer on request. Win/Win.

    Besides, I don't believe you don't carry at least $3 or $4. bucks on you. :P
  • whyfi
    whyfi
    I'm not a cash person, either, which is why I've only been to Sepia once. I really liked the place, but I'm not going to go out of my way to get cash for a drink. If I'm going to head to a shady corner store ATM, at that point it's more convenient (and cheaper!) for me to just grab a bottle or two there and head home. Yeah, I'm lazy when it comes to relaxin'... deal. Anyway, the way I see it, they've lost hundreds on me alone because they don't wanna pay an annual fee and 3% plus 15 cents per transaction.
  • lp1378
    lp1378
    Wow, how do people get around NYC without using cash? To me, the best thing about this place is the underground economy. No paper trail, baby.
  • poot
    poot
    With all of the card reward programs available to consumers, using cash is almost equivalent to giving something away. I use credit for nearly every purchase I make and at the end of the year redeem points for gift certificates to help out with holiday shopping. You can do the same with debit programs (and avoid the potential to rack up debt and huge interest fees.)

    I agree that credit card fees are the cost of doing business. You may lose money on a small ticket sale; however you may also gain larger purchases that a customer might not have been able to make if credit were not an option.

    My understanding is that debit purchases are less attractive to credit card companies because they can't garner the same fees as they can with credit. Perhaps store owners can "encourage" customers to chose debit without violating any agreement in place.
  • alafairnadia
    alafairnadia
    I, personally, don't have a problem with reasonable minimums - $10-20 or so makes sense to me. and, frankly, I'd rather a place accept credit cards and have a minimum than not accept cards at all.
    and I think the OPs example is kinda lousy - you're already getting a discounted product. I have a bigger beef with Sepia's happy hour "specials" - yes, the beer is $2. it's also in a glass half the size of a normal beer, which costs $4 ... so what's so special about that?

    what I find insane are some of the minimums over in manhattan. mannahatta, for instance, has a $50 credit card minimum (I think it's $50 - it could have been $100 - who knows?). how much skimming are they doing off their cash take, eh?
  • dingleberry
    dingleberry
    Wow, Brookefetish has an agenda against soda!!!!You want to charge 3 dollars to your card???What a LAMO!!!!Brookfetish the world does not revolve around your whinings and complaints, do yourself a favor go to your bank take out a $20 bill and your life would be so much easier, you would not be complaining so much. I wonder what you would do if you went on vacation to a third World country or to France where many if not most places don't take cards, i guess you would be hungry and whining how they do not take your preffered method of payment!!!
  • whyfi
    whyfi
    Talk about an agenda... :roll:
  • alafairnadia
    alafairnadia
    dingleberry wrote: Wow, Brookefetish has an agenda against soda!!!!You want to charge 3 dollars to your card???What a LAMO!!!!Brookfetish the world does not revolve around your whinings and complaints, do yourself a favor go to your bank take out a $20 bill and your life would be so much easier, you would not be complaining so much. I wonder what you would do if you went on vacation to a third World country or to France where many if not most places don't take cards, i guess you would be hungry and whining how they do not take your preffered method of payment!!!
    Hi - please check your private messages. I messaged you with a request and warning - I'd appreciate it if you'd take a look and get back to me.

    - mod
  • brookfetish
    brookfetish
    dingleberry wrote: Wow, Brookefetish has an agenda against soda!!!!You want to charge 3 dollars to your card???What a LAMO!!!!Brookfetish the world does not revolve around your whinings and complaints, do yourself a favor go to your bank take out a $20 bill and your life would be so much easier, you would not be complaining so much. I wonder what you would do if you went on vacation to a third World country or to France where many if not most places don't take cards, i guess you would be hungry and whining how they do not take your preffered method of payment!!!
    interesting.

    who the heck are you?
  • dingleberry
    dingleberry
    Hey Brookr try going to India with a Credit card!!HAHHAHAHHA!!!
    Happy holidays the card comes Handy with all the holiday shopping!!
  • brooklynpotter
    brooklynpotter
    i've done some research on this because those limits are in violation of the contract the vendor has signed with the credit card company. vendors are also violated from charging a credit card surcharge, but they can offer a discount for using cash. semantics, i know.

    this kind of thing really pisses me off, because a vendor signs a contract. ask for cash, there are ATMs everywhere. (and there are banks that reimburse you the ATM fee. mine does, in both directions.)

    and because i'm not only a consumer but also a vendor. (doesn't that sound like sy sperling? i'm not only the owner of hair club for men, i'm also a customer... anyhow.) i take cash, checks and credit cards (online only). and it does cut down on profit. it also brings me more customers. double edged sword.

    regardless, it's a v-i-o-l-a-t-i-o-n!
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