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Some stores ignore credit card rule

They're not supposed to have a minimum-purchase requirement, but you can see why they'd want to.

By Karen Datko Nov 3, 2009 1:14PM

Has this ever happened to you? You pull out your MasterCard to buy a pack of gum, and the clerk says you’ve got to spend more, say $5 total. The store has a minimum-purchase requirement for plastic.

If that’s the case, the store is violating the rules set by MasterCard and most other major credit card brands, David Seaman recently wrote at MainStreet.


But we can understand a store’s motivation: If it followed the rules on accepting credit cards for small purchases, it probably wouldn't make money on the sale.


Here’s how this works, David explained:

  • A store agrees to pay the credit card company a set amount per credit card transaction, about 15 cents or 30 cents.
  • The store also agrees to pay a set percentage of the purchase price, called the interchange fee. That’s usually 2%.
  • Do the math when a store sells a 99-cent pack of gum. If you use plastic, where’s the profit? (The fees -- for now -- are generally lower if you use your debit card as a debit card, rather than saying “credit.”)

What are the card company rules on minimum purchases? According to David:

  • MasterCard, Visa and Discover prohibit minimum-purchase requirements.
  • American Express “discourages” a minimum, but also insists that all credit cards accepted at a store be treated the same.

How does knowing this affect your life? We agree with our friend Jim Wang of Bargaineering, who told David how he would handle the situation:

I would much rather be slightly inconvenienced, pay with cash, and have the store stick around than be able to use a credit card and see them struggle or go out of business. I understand it's against the credit card company's policy but I don't really care.

Why do stores agree to such punitive terms? They have to if they want to accept plastic. Credit cards are convenient, both for the customer and the merchant, and customers who charge purchases are inclined to spend more.


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