Can Merchants Require A Minimum Purchase For Credit Card Transactions?

Kimberly Rotter

Kimberly Rotter | Blog

Apr 28, 2014 | Updated Apr 27, 2016

We’ve all seen it — that sign next to the cash register that reads, “$10 Minimum for Credit Card Purchases.” Why do merchants do this? Can they require a minimum purchase if a customer wants to pay with credit?

In general, merchants would rather you use cash, thereby averting the fee completely, or failing that, by forcing customers to spend a little more to make the fees worth the merchant’s while. (Credit card issuers typically charge merchants a flat per-transaction fee as well as a variety of percent fees depending on the nature of the transaction.)

If you’ve ever ducked into a corner convenience store hoping to buy a cup of coffee and a pack of gum, you know how annoying these minimums can be. What you may not know is that up until January 2010 and the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a minimum requirement for credit card transactions was probably a violation of the merchant’s agreement with the credit card providers.

No longer. A small clause in the Dodd-Frank Act prohibits payment card networks from “inhibiting the ability … of any person to set a minimum dollar value for the acceptance by that person of credit cards, to the extent that … such minimum dollar value does not exceed $10.00.” In other words, merchants can set a minimum of up to $10, but not beyond.

Posted Minimum Above $10

So what can you do if you walk into a store and see a sign announcing a minimum above $10? Here are a few do’s and don’ts.

Do’s And Don’ts

  • Do approach the merchant, if possible. Some merchants are unaware of the law while others choose to ignore it. Either way, once confronted by you the merchant may accept your credit card for the lesser transaction amount.
  • Do contact the issuing bank or the credit card provider if the merchant won’t comply.
  • Don’t bother engaging the store employee (he or she is unlikely to care or have the authority to waive the policy); you’ll just frustrate yourself.
  • If this is a store you like and want to support, do understand that smaller establishments have smaller profit margins, and fees on small purchases can severely cut into profits. The best way to support your local shopkeeper is by paying cash as often as possible.
  • Do realize that the minimum applies to credit card transactions only. Merchants should not set minimums on debit card purchases.
  • When all is said and done, don’t hesitate to take your business elsewhere.

“Checkout Fee” – A Surcharge On Credit Card Users

New laws crop up regularly it seems (just this past January, a law was passed that allows merchants — unless prohibited by state law — to impose so called checkout fees on customers who pay with credit cards), and it’s a rare consumer who’s able to keep up with all the changes. That said, if a merchant requirement gives you pause, don’t hesitate to stop and think about it. You can (almost) always choose to say “no thanks,” and even if you’re temporarily caught having to comply just this once, you don’t have to become a repeat customer.

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