Minimum Purchase Required

September 28, 2009 in Current Events, Questions with View Comments

Downstairs at the little cafe I buy my lunch at every day, there is a sign on the cash register:

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I’m sure you have seen something similar to this at other restaurants/shops in your part of town.  It has never been a problem to me until one day, when I wanted to buy a drink, and that’s all.  I almost never have cash on me, so my only option was to use my debit card.  The only catch was that I had to get up to $3 before the lady would ring me up, so I ended up getting a few things that I really had no intention of purchasing.  (In their defense, the Nerds were a tasty snack when I was struggling at 3pm.  But still.)

Do you see something wrong with that?  Forcing my to buy items that I don’t want to just so I can use a debit card.  Now, I realize that companies have to pay a fee for every credit card transaction, but that is usually 3% or so.  Not that much.  But at the same time, I believe that companies should build that into their pricing for whatever they are selling.

I have seen places that have a $10 minimum amount, which is just absurd if you ask me.  What if I only want to spend $5?  If I don’t have cash, that means I have to spend twice as much as I wanted to spend just for the “convenience” of using a debit card.  If you ask me, it’s a way for a store to make you spend more in order to shop there.

And here is the kicker… according to Visa and MasterCard, this is against their terms of service for their Merchant Accounts.  From Visa’s website:

Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge a surcharge fee when you use your Visa card.

So there you have it… What these places of businesses are doing could potentially cost them their Merchant Account.

How do you feel about this?  Should companies be allowed to have these kinds of policies?

  • Tiffany
    So is there a law for this, because I think that this is ridiculous
  • I don't think it's an official law, but credit card companies have policies against it.
  • that's true, and if you pay it off, it can help your credit. It's a smart thing to do!
  • Jason
    I pay for everything with my Credit Card because then I can track my purchases and even my budget using sites like Mint.com. Plus, I get great rewards point on it, and that's undeniable extra cash in my hand every month or so. As long as you set up alerts on the card site to help you know exactly what your balance is (and be sure you don't charge money you don't have the cash to pay for), it's smart.
  • That's a good point. I have been trying to carry cash around more so I know EXACTLY how much I have to spend on stuff.
  • I didn't know that! I kind of like it when they ask for my ID, I have to admit...
  • Matt
    I think you should just pay with cash. There is no fee to withdraw cash (providing it is at your bank). Besides, maybe this will make you really think about if you should buy the drink. I have been in stores wanting a drink or candy bar, etc. and they have a minimum charge. I end up not buying anything realizing that I didn't need it. In that regard, the plan has backfired.
  • Diane
    It is definitely breaking the card holder's agreement when merchants pull this stuff. Did you also know that they're not supposed to check IDs either?

    http://www.privacyrights.org/ar/Alert-FS15.htm
  • Great perspective, thanks for posting. I would imagine it would be a bit different from the business owner side of it...
  • Interesting. I am a business owner, so I can see it from both sides. Before I bought my coffee shop from the previous owner, she had established a $3 minimum purchase rule. I did away with it, mostly because I feel bad making people buy more than they want. It's been something I struggle with though, because I have a per-swipe fee on top of the percentage, so if someone buys a $1 muffin, I only get like 80 cents of that by the time all is said and done. So it's better for me if they buy more, because then I am selling more product AND it makes the swipe fee a little less important. But honestly, I haven't noticed a huge difference since I stopped with the minimum... it's not breaking me or anything, and like you said, it's built into the price of the product. It IS good to know that it's against the TOS to set a minimum though... I had no idea.
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