When is Minimum Billing Allowed?

Last week my family and I celebrated the good weather with an afternoon barbecue. We went wild at the grocery and bought everything you could possibly imagine: potato salad, ketchup, hot dogs, burgers, buns, onions, relish, chips, brownies, soda, beer, you name it, we had it. We were prepared for some serious grilling. There was only one problem. We could not light the charcoal. There were no matches. Anywhere.

Seeing that hungry glint in my kids’ eyes, I literally ran to our local convenience store just down the street and found a display of lighters right next to the check-out counter. I grabbed the first one within reach and threw it down on the counter. The guy behind the counter rang me up and said “that’ll be 99 cents, please”. Before I had time to catch my breath, I realized that there was no cash in my wallet. I’d spent it all on food for the barbecue just a few hours earlier.

Feeling totally embarrassed, I pulled my Visa card out and handed it to the cashier. You should have seen the look he gave me. He would not even reach for the card. “Sorry buddy, five bucks minimum for credit cards”, he said (a little too smugly).

OK, I know that charging a 99 cent purchase on my credit card is a little ridiculous, but it was an emergency! Besides, I know that I can charge any amount to my credit card, no matter how small the transaction. This cashier's rule caught me completely off-guard. On the one hand, I wanted to tell him he was wrong and report his business to Visa and MasterCard. On the other hand, a line was now forming behind me and I REALLY needed that lighter. So rather than arguing, I grabbed two magazines on display next to the terminal, shut up, and paid the man.

Does this situation sound familiar? As a customer, it’s a hassle to add on items we do not want in order to pay for the ones we need. We feel like we’re being taken advantage of. Who charges $3.99 for a stupid magazine anyway! As a merchant, it is also a hassle, but for a different reason. Charging single items like gum and bottles of water to a credit card end up costing the merchant more than the item is worth because of interchange rates and other fees.

There seems to be a lot of gray area when it comes to store policy for accepting credit cards. Despite the widely differing point-of-sale practices, merchants are not allowed to restrict their customers with minimum or maximum limits for credit card sales. Customers like me might put up with a “$5 minimum on credit cards” sign at the register, but all it takes is one customer who knows the rules (and has time to argue!) and you will hear from your credit card processor.

Merchants who continue to violate this rule and many other rules set by Visa and MasterCard risk unnecessary fines and termination of their merchant contract. If your merchant contract is terminated, your name will be placed on the Terminated Merchant File list and you may never be able to accept credit cards again.

So for your own sake, get rid of those minimum purchase signs and DO NOT restrict your customers or you may end up in serious trouble. Besides, you are in business to satisfy your customers so they return to you instead of shopping at your competitor's store. Customers will not put up with this practice and neither will your credit processor.

For more information, visit Visa and MasterCard's websites. There you will find rules for merchants to follow so you never risk penalties.

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