Visa: Minimum Purchase Requirements Not Allowed
Have you ever tried to make a small purchase using your credit card, only to find that the store owner had a minimum purchase rule in place? Many of us assume that such rules are legitimate, and so we buy things we possibly don’t need in order to meet the minimum purchase amount.
But according to Visa and MasterCard, such minimum charges aren’t allowed in their terms of business. Merchants who accept Visa and MasterCard are not permitted to set a minimum amount for which the card can be used as payment. Nor can they tack on fees for small purchases. American Express allows minimum purchase amounts, but insists that merchants impose those amounts on all the credit cards they accept. Since Visa and MasterCard won’t permit that, and since most merchants accept those cards, you can bet that most minimum purchase amounts are bogus.
The merchants who impose these rules often don’t know it’s not permitted; they are simply trying to recoup some of the fees they pay for credit card processing. Still, some consumers don’t like the rule. One irate customer even complained to Visa, who responded with a letter stating that the practice wasn’t allowed. He now shows the letter to any merchant who insists he make a minimum purchase to use his credit card.
N. S. said,
December 13, 2007 @ 7:06 am
Very true! I often encouter this at mom and pop shops in NYC. After imploring the merchant to “make an excception” so that I can get out of there I often fail and just call (outside the shop) my card issuer (# on back of card) and they happily take the merchant’s name and address. They tell me they send it on to MasterCard or Visa so that those companies can contact the merchant via the merchant’s bank. The merchant gets fined after more than one report in a certain time frame. If the merchant don’t like the fees don’t take credit cards. Though we are going to a cashless society so it would not be a wise business decision to do so.
Tom Mahoney said,
December 13, 2007 @ 8:46 pm
You are quite correct - minimum purchase policies are not permitted by Visa and MasterCard. Why would they care - they get 1-3% of every sale plus a per transaction fee that is usually $.05 - $.15.
If a cardholder purchases anything less than a couple of dollars worth, you can figure the merchant makes about $.50 profit before credit card fees. The fees eat up almost half his profit. On a $2.00 sale, the merchant makes $.29. Sorry, Visa, we can’t make a living that way.
Tom Mahoney
Director, Merchant911.org
Developer, PreventChargebacks.com
Saafan said,
April 6, 2008 @ 12:55 am
I agree with no minimum payment with a credit card , this sounds a merchants invention , bad one though, well, the processing fees are applied per purchase on percentage basis; thus not related to how much is the amount, lets say on a 2% per purchase , makes the processing fees on a 200 $ purchase =4 $ , and in another purchase with 2 $ which will be 4 cents , no big deal , merchants are not making any sense with those limits
C said,
June 29, 2008 @ 6:41 pm
Hate to tell you it is around 2% per transaction. PLUS the flat rate fee and if it is a business card or a rewards card it process at an even higher rate. OUt of country cards too process at a higher rate.