Is it legal for retailers to charge a fee for your debit card purchase if you spend less than $5?

Question

I have noticed that some retailers in my town are charging a 50 cent fee if you use your debit card an spend less than $5.00.

Answer 1

I haven't processed credit card payments for over 10 years, but the rule used to be that you had to accept any charge - even a 25 cent pack of gum.

However, I don't believe they had any rules about whether or not the business could have a surcharge to cover their losses on the small transactions.

Businesses are charged a percentage of total transactions made on credit cards. The percentage is calculated by the average amount of each charge. For example, if your average customer charges $250, you may only pay a fraction of a percent. However, if the average customer charges only $20, you'll pay a higher percentage.

Small charges lower the average, so the business gets burned on small purchases.

Contact your credit card company and ask if they have any policy barring businesses from collecting a surcharge. They won't know unless someone tells them.

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Answer 2

In Illinois, it is NOT legal for retailers to charge a transaction fee for purchases. They CAN stipulate that a purchase must be at least, for example, $15 to use a debit/credit card. They definitely cannot charge a fee for a purchase.

The retailers pay about 1-3% for each purchase back to the card company.

Check your local state laws regarding this fee. It may be illegal in your state as well.

Answer 3

Yes. Back in the 1980's, many stores had minimum purchase requirements to use credit cards (usually $10), because there is a base amount which the credit card company charges in order for the store to reimburse the money (this amount was lowered recently). If the amount you charge is too low, then the store is actually losing money when they sell you something.

Answer 4

Sure is. Using a debit card is a privilege. Plus the retailer gets charged for all card transactions.

Answer 5

Yes....some charge a fee no matter how much is purchased...it offsets the cost of proccessing and equipment use.
Some companies even charge a fee for using a credit card if the amount is below the threshold.

Answer 6

Bear in mind that the retailer is actually charged & are passing the charges along to you

However, if this is processed thru VISA or MASTERCARD and your debit card is processed as one of these then it is violation of the merchant agreement with VISA/MASTERCARD for the retailer to assess a charge for use of one of those two methods of payment.

The merchant would not be in violation of the processing agreement if they raised all thier prices ever so slightly to cover the cost. As far as I know it isn't "against the law" but it is against merchant contracts.

If this merchant gets reported to either VISA or MASTERCARD then they risk loosing the ability to take that method of payment & also a fine. Consider BEFORE you choose to report them that they are NOT OBLIGATED to service VISA/MASTERCARD

The effect could be that you loose the ability to make that type of payment

Answer 7

It's legal, but it may be stupid if it antagonizes the clientele. In the town where we have our vacation place there is a small supermarket that has a minimum for credit cards. You learn to live with such things, especially when there's no competition. The staff are apologetic at least: and why blame them for the decisions of some invisible boss.

Answer 8

1. Facebook 2. Twitter 3. Mobile Phone 4. Laptop 5.Computer Lol :p

Answer 9

yes besause they actually get charged for taking your card. some places just say that u cant use it for anything less than 5 dollars to keep that from happening.

Answer 10

Yep, because the credit card company charges them