Merchants are not allowed to charge a $10 minimum for credit cards. All the major credit card companies list this term in their merchant terms of service. You are allowed to report a merchant. The merchant is then warned a few times before the merchant looses the ability to accept that specific card. Even if the charge is only 25 cents! You must accept it or face consequences. This is horrible for small business merchants. I know a lot of small business merchants who only charge about 30-50% than they pay for wholesale not including shipping. Off the total sales I'd say most of it goes towards paying for the products, staff payment, and rent. When using Credit Cards the merchants have to pay 6% to 15% I believe. That is very high in my honest opinion. I am obviously for a $10 minimum purchase but it should still be optional. I feel that everyone should carry some small amount of change for an emergency anyways, so it shouldn't be a surprise if they run into these sort of situations. Enforcing this petty term is stupid because that means a lot of merchants will drop the credit card option or raise product prices. We already pay enough for gas and living now food and products prices will go up even more. I also feel it's stupid because why do ATMs get to charge a $2.50-$3.50 fee when you withdraw from another bank. Is this not just like forcing a $10 minimum or adding a 50 cent fee. I already get charged $2.50 for using another an ATM from another bank by my own bank company. Oh and even better! If credit card companies like American Express offer reward programs the cost on the merchant is generally a lot higher. Our business won't accept discover and American Express for this reason. MERCHANTS have to pay for YOUR rewards. Great deal for you but bad in the long runs since we're going to just raise prices or drop the credit card company. I feel this needs to be changed and voted on. It's a part of business. It's like having the ability to do wholesale but you can't charge a minimum purchase of $1000 to new clients so they can become wholesale members and receive the benefits.
This is absolutley true. Of course, every gas station I walk into has that $10 sign on the wall. The reason this is not enforced, is because Visa does not have any secret policy that wander around peeking into shops looking for the minimum sign. Although, I have threatened to call the Visa police on venodrs before (purely for fun) I do always point this fact out to them that it is against their policy. Visa really doesn't complain, because it hurts the business owner, not the consumer. They hurt the consumer plenty on the interest side of the card and any other fee they decide to charge. It's no wonder Visa sponsors the OLYMPICS every year!
Yeah true i mean i wouldn't mind if the transaction fees weren't so high. I don't even think that if my company earns a certain amount or more a year that the percentage will drop. It really sucks. I really wish that they'd get rid of the ATM fee as well. it's about $3.00-$3.50 now to withdraw from an ATM that doesn't belong to your bank plus the fee that your bank charges you for withdrawing from their competitor.
When Visa introduced their first card a long time ago, they guaranteed that a business could not surcharge a customer for using their Visa card, and they could not set a minimum amount for the transaction. It's one of the few Visa policies that has stuck all the way through. In this case, I think that it is a difficult one for card issuers to want to change because they make the majority of their money from card holders and not business. In the spirit of business, the regulations usually favor where the money is coming from.
Depending on the type of shop you have this can easily be bypassed just by pricing your goods high enough that it isn't an issue. You can also try bundling products if they're too cheap. Instead of 1 item for $1, make it 5 for $5, etc. This won't work for some business models obviously, like the convenient store example. But for most online shops it's viable.
Very true but we're deciding right now if we're going to drop the card machine period and only use it for online purchases. In store the customers will not be able to use the card anymore. I know 5 other businesses who recently dropped the card machine and just added an atm to their shop. If the customer really wants it they can be responsible enough to go pull money out for themselves. We're merely carry the machines at a convenience in no way do I trully feel we need it. About 90% of our transactions are in cash anyways even the products that total over $100 are usually paid in cash. Visa better think twice about their policy soon. I don't think I'm the only one willing to drop them from the physical business side. I'd say in total a year our shop makes only about 40-50K a year in credit card sales. Most of the time those customers do have cash but feel insecure without having at least $20 on them, so they charge it. If we dropped it out we'd only loose maybe 1 in 10 customers. Still not that big of a dent. The average sale is $12 for us. My online shopping cart requires a minimum order of $10 including shipping so I don't mind as far as online. Besides that online fees are a little less depending on your payment gateway.
Right, we process primarily for digital content so shipping costs aren't an issue for a lot of our clients. Our minimum order is typically 2.95 but we make exeptions depending on the product.
Reward cards are also put into place to of course make customers swipe their cards more often to rack up their cards and interest, but more so to keep them swiping so they can hit the business owner for those transaction fees as well!
One other thing you can do (probably only useful for retail) is discount for cash purchases. How you set your prices is your own business, and it isn't against Visa/MC regs to discount for cash.
Thats true...I could also discount credit card purchases *is that against the terms of use* Then again the discount may end up coming out to the amount i have to pay for transactions... Exactly >.< It's like the world's largest scam >.< Okay not really but it feels like I'm being robbed each time I allow a customer to swipe their card under $10.00