The cafe in our office building requires a minimum purchase of $5.00 before they will accept your credit card. Is this legal?
2006-11-01 08:49:02 · 10 answers · asked by Portia Panther 1 in Business & Finance ➔ Credit
Like answerer #1, I have also signed merchant account agreements. Not sure where all these other peple are getting their answers but from personal experience, they are mistaken.
So here is your answer...
When a company wants to accept credit cards it has to sign a contract agreeing to certain terms and conditions. So while it is NOT illegal (they cannot go to jail over it) it IS against the terms of a retailers contract to have a minimum charge.
Also, they are not supposed to give discounts for paying cash, or charge a percentage for the amount you want to charge.
See an additional source below.
2006-11-01 11:43:48 · answer #1 · answered by perfectcreditclub 3 · 0⤊ 0⤋
No. I have signed merchant account contracts before and they specifically forbid this.
The fact that someone can decide who to sell to, or what price to charge is not the point. If they accept credit cards for purchase....they can not impose a minimum purchase required to use it....regardless of their cost per transaction (which is usually about $.30 + 2 - 4%...The only transactions they lose on are transactions that profit less than $.31....how many transactions would they be liable for losses? Transaction would have to be very small to be a loss....less than $2 and if they did a large number of these they would not accept cards in the first place.
Net result...there is no real liability for losses per transaction and contracts do not allow for setting minimum purchase requirements to use a card.
2006-11-01 08:51:06 · answer #2 · answered by Anonymous · 2⤊ 1⤋
Of course. They aren't legally required to accept credit cards at all. They have to pay a percentage of every transaction to the credit card company, so they want to make sure the transaction is worth their while.
Stop by the ATM on your way there if it's a problem for you.
2006-11-01 08:51:56 · answer #3 · answered by leaptad 6 · 1⤊ 1⤋
Yes, remember that the places get charged by the transaction company to process the card. Each and every time they take a credit card they loss some money because they get charged.
2006-11-01 08:52:14 · answer #4 · answered by The Druid 4 · 1⤊ 1⤋
Yes. The merchant has the discretion to refuse to process ANY credit card transaction. The reason for the minimum is because of the credit card company chargebacks to the merchant.
2006-11-01 08:51:24 · answer #5 · answered by Perplexed Music Lover 5 · 1⤊ 1⤋
Yes, it is legal. The business owner can decide if they want to take credit cards at all...just as they can decide if they will take checks or be "cash only".
Handling credit card transactions is an additional expense for businesses that they don't have with cash transactions. Many places do not want to incur these additional expenses for very small transactions.
2006-11-01 08:53:52 · answer #6 · answered by Xeod 5 · 1⤊ 1⤋
yes. They can require that because the business is charged for transactions, they are covering the cost they get charged and guaranteeing they will make a profit on the transaction then.
2006-11-01 08:51:31 · answer #7 · answered by Anonymous · 1⤊ 1⤋
I believe they do have the right to do this, but I'm not sure.Be lucky yours is $5, because at our store the minimum credit card purchase has to be $7.50!
2006-11-01 11:17:13 · answer #8 · answered by indrep33 3 · 0⤊ 1⤋
They can do just that. It cost them per transaction. So if the purchase is for less then they might as well give you the items for FREE! that isn't going to happen! lol
2006-11-01 08:51:32 · answer #9 · answered by golferwhoworks 7 · 0⤊ 1⤋
I am not a lawyer, but I have seen it done at many places. I have seen it done at five dollars and ten dollars.
2006-11-01 09:36:29 · answer #10 · answered by Anonymous · 0⤊ 1⤋