Tip About Minimum Credit Card Purchases

[Luv'sTink]

I think you;re probably right about giving a discount instead of waiving the fee. But I'm pretty sure CC companies make most of their money off interest, not vendor transaction fees.

Dollar Minimums and Maximums
Always honor valid Visa cards, in your acceptance category, regardless of
the dollar amount of the purchase. Imposing minimum or maximum purchase
amounts is a violation.

No Surcharging
Always treat Visa transactions like any other transaction; that is, you may not impose any surcharge on a Visa transaction. You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.

This was coppied from Visa's Merchant Rules section. I didn't do a good job of making that clear.

 

[FinallyBoughtDVC]

Wow .really? because this is exactly how it is with mine. I get a list of the exact percentage per card. The better the card the more I pay. For Visa’s newest card that is for people who charge over $50,00 a year I will be paying close to 3% on all sales run with that card plus my merchant fees on top of that. Yes as a merchant we absolutely pay for those extras provided by the credit card company.

Regardless of weather or not they say we do I can tell you as a merchant...we do, but then again you do becasue we turn around and raise prices.

Yes, I do as well. There are certain "signature" cards and rewards cards that I pay extra fees on - without even knowing exactly which ones they are. Visa is beginning to treat these cards like AMEX cards - the logic being that the demographic is one that we merchants should want to pay more for. There are international fees and all kinds of fees. I couldn't even begin to decipher some of them - interchange fees and what not. I wish I had my statements here - darn accountant has them.

 

[mickeysgal]

There was a big merchant in Australia (Cole's) that had most of the departments stores, target, etc - they really had the retail market cornered. Their stance to the banks - if you want my banking business you pay ME. Wouldn't Walmart love to be in that position?

Can you imagine Walmart AND Disney flexing that banking muscle?

 

[mickeysgal]

The American public cannot possibly be expected to be able to pay without credit. Our nation is so messed up in this aspect. As a company you have no choice but to take credit. If you do not you are not going to be in business because the American public on a whole spend much more than they make and need the credit to buy before their payday.


So in essence we as retailers are held hostage by processors and credit card companies.

I don't believe that as a whole the American public is using credit because they're overextended. I think credit cards are being used as a whole primarily as a convenience so that you don't have to carry cash and that as a benefit, you can rack up rewards of some kind. Its just one more step closer to a cashless society.

 

[va32h]

So you're precisely in the sweet-spot for small, local businesses, and your clientèle should have no interest in the more standard offerings of the national chain stores. The national chains provide the standard offerings; you provide the unique offerings.

You'd think, wouldn't you? I still have a part time job on the side to augment my business earnings. It's frustrating. But every year is a little better.

As a merchant who sells primarily online, I have to take credit cards, there's no other way. When I sell at trade shows, I have found that accepting credit cards wins me business. Not all the merchants do.

At the end of the day, credit card fees are yet another cost of doing business. My philosophy is that if I can't afford the fees, I shouldn't be in business. I do end up raising my prices to keep my profit margins livable - but there are many things that require me to raise prices, not just cc fees.

 

[CJMickeyMouse]

At the end of the day, credit card fees are yet another cost of doing business. My philosophy is that if I can't afford the fees, I shouldn't be in business. I do end up raising my prices to keep my profit margins livable - but there are many things that require me to raise prices, not just cc fees.

What you are saying makes perfect sense. But in our business, we cannot raise prices. The vast majority of our business is paid by insurance.... and the insurance company tells us what we are to charge. It is illegal to tack on any fees, percentage, etc. So if we were to accept credit cards our margin (which already is lower than we would like, but out of our control) drops. The only control we have is turning down insurers... which we do on a regular basis. Some actually want to pay us less than our acquisition cost if we sign a contract with them. Ummmmm let me think. NO!

Usually our customers understand.... and we are willing to explain it to them and go so far as to tell us how much we are making on each sale. But then there are the few that tell us we are in the dark ages and behind the times. Well, they can just drive the half hour to get to a similar business that is "up with the times".

 

[bicker]

I think it's unfair for any business to be required to lose money on a particular transaction, whether its Walmart, Neiman Marcus or a mom and pop shop.

There is nothing "unfair" about complying with an agreement you enter into. Many stores have sales and put loss-leaders front-and-center in their advertising. Yet still, customers can go into the store and purchase just the loss-leader. Many folks would cry foul if a Wal-Mart or Neiman Marcus refused to allow you to come in just to buy the stuff they've discounted so heavily that they lose money on each particular transaction. It is their choice to offer those sales, just like it is their choice to accept credit cards. Any fault there might be for the lack of choice in either case falls on the general public who insist that their retail stores operate that way. The fault is not on the part of the credit card companies, who are just offering something which buyers and vendors want, nor the individual buyers, who are just partaking of something freely offered them.

 

[bicker]

But I'm pretty sure CC companies make most of their money off interest, not vendor transaction fees.

I think (roughly speaking) that the credit card companies break-even on the transaction fees, and make profit on the interest.

 

[bicker]

You'd think, wouldn't you? I still have a part time job on the side to augment my business earnings. It's frustrating. But every year is a little better.

No question business is tough. I'm glad I work for someone else... it's his problem to worry about what you're worrying about.

As a merchant who sells primarily online, I have to take credit cards, there's no other way. When I sell at trade shows, I have found that accepting credit cards wins me business. Not all the merchants do.

So the costs associated with it are therefore worth it, because it is a net-win for you. Then you should definitely do it. Your choice though. One thing that comes up often on this forum is the realization that some businesses simply aren't profitable ventures. And that's okay too. The market will ensure that there is enough profit available for anything they really want/need.

At the end of the day, credit card fees are yet another cost of doing business. My philosophy is that if I can't afford the fees, I shouldn't be in business.

Amen.

 

[JPN4265]

First, where did you hear this?

Second, it's usually only small businesses that use this practice. In my opinion, they wouldn't do it just because...they must do it because the smaller purchases make using the CC servive cost prohibitive. Since it's not really a big deal, I don't think it's worth reporting them because they're a small business and it just seems kind of petty to hurt a small business person trying to get by just so you can buy a pack of gum with your visa. If you don't like the policy, shop elsewhere...why would you want them "blacklisted?"

Maybe its just the cost of doing business. They want the use of the credit card company, they should accept the problems that are associated with them.

 

[Mrs.Toad]

There is nothing "unfair" about complying with an agreement you enter into. Many stores have sales and put loss-leaders front-and-center in their advertising. Yet still, customers can go into the store and purchase just the loss-leader. Many folks would cry foul if a Wal-Mart or Neiman Marcus refused to allow you to come in just to buy the stuff they've discounted so heavily that they lose money on each particular transaction. It is their choice to offer those sales, just like it is their choice to accept credit cards. Any fault there might be for the lack of choice in either case falls on the general public who insist that their retail stores operate that way. The fault is not on the part of the credit card companies, who are just offering something which buyers and vendors want, nor the individual buyers, who are just partaking of something freely offered them.

Bicker, I never said it was unfair to make a business comply with an agreement. I said the clauses within the agreements themselves are unfair. Clearly some businesses do not want to accept credit cards for de minimus purchases, or else they wouldn't be putting up their signs. But (I assume) they feel forced to agree to it because the credit card companies likely won't remove the clause, and clearly they want to be able to accept credit cards for most of their sales.

What if the credit card company insisted on a clause that the merchants couldn't accept checks, or Visa insisted they didn't take MasterCard? Would that be OK with you, too? I mean, after all, if the merchant doesn't like it, he doesn't have to accept their credit card, right?

This example illustrates my point that the merchant/credit card company agreement is separate from the merchant/customer transaction. In this situation, I'm sure most people would agree that the credit card company should have no right to dictate what other methods of payment the merchant may accept. IMO, this should extend to the merchants ability to decline credit cards for miniscule sales.

Now, I know what you're going to say. The difference is that the customer thinks he can use his Visa card for any purchase in any store that has the logo displayed, and he should not feel obligated not to use the card. This is where we started. I think that if the "no credit cards for purchases under $10" sign is displayed along with the Visa logo, the customer can freely choose to avoid that store as easily as he can choose to avoid stores that do not have the logo at all. Like I said, I use my credit card a lot, for nearly every purchase that doesn't come from a vending machine, but if I don't have cash on me and can't buy a pack of gum, I don't care.

I think the average credit card holder is with me in not caring, because most people don't complain about it, they just pull out some cash, go to the ATM, or choose a different store, and remember to bring cash next time they visit that business. I don't think most people know businesses have agreed to accept the card for any size purchase, otherwise the OP wouldn't have felt it necessary to give us the "tip" that they have to and we can tattle on them if they don't.

I think that policies can change. What was fine in a time when credit cards were used sparingly may no longer be fine in a time when people use them for gum. I get what the standard policy is now. I'm saying I think it should be changed.