HOME > Chowhound > Not About Food >

What's the deal with the $10 CC minumum?

Ferrari328 Dec 9, 2008 11:01 AM

I thought it was illegal after the hulabalo with the new parking meters in Boston when they had to remove the minimum requirements? Or that the contract with Visa etc required that they accepted any amount?
Yesterday at Fuloon they really grumbled about taking a CC for less than $10 and today at Emilianoz, that have the same requirement, I actually talked to them about it and their story is that they get a better rate from their CC company (service provider?) if they have a $10 minimum.

Does anybody have the real scoop on this since it really irritates me..

On a good note, Emilianoz in Medford was really nice.

  1. Click to Upload a photo (10 MB limit)
Delete
  1. j
    johnnytang24 RE: Ferrari328 Dec 9, 2008 11:07 AM

    Some credit card processing companies charge a fixed rate, say $.25 per transaction, so if you buy something for $1.00, they'll end up paying 1/4 that in credit card fees! If you buy something that's $10.00, they still only have to pay $.25

    1. jgg13 RE: Ferrari328 Dec 9, 2008 11:14 AM

      The contracts with teh CC companies prohibit them having a minimum purchase value. If you choose to, you can report them to the CC company, but it is unlikely that anything would happen to them. They do this because they tend to get screwed over on smaller purchases, but they're trying to have their cake & eat it too - instead of doing a cost/benefit analysis on the pros & cons of accepting CCs, they're trying to only get the pros and not the cons.

      1 Reply
      1. re: jgg13
        invinotheresverde RE: jgg13 Dec 9, 2008 11:23 AM

        Exactly!

        If they didn't accept credit cards, you wouldn't be eating there, and they'd lose more than the 25 cent processing fee.

      2. almansa RE: Ferrari328 Dec 9, 2008 11:23 AM

        You are correct that it is against their contract with the credit card companies. They might grumble, and I don't blame them, but they do have to accept it. See, the problem is that when they are already operating at a low gross profit, to have a percentage taken out of a small check hurts. Remember, the average successful restaurant in this country has a net profit of about 2.9%. That's about as much as a credit card fee.

        1. ScubaSteve RE: Ferrari328 Dec 9, 2008 01:22 PM

          it's not illegal, just a violation of the contractual agreements with CC companies as stated.

          ...moving to Not About Food in 3,,, 2,, ....

          1. 9
            9lives RE: Ferrari328 Dec 9, 2008 03:54 PM

            FYI, I move to MX for 1/2 of Jan and Feb.

            I call ed MC to not freak out at all of the out of country charges. They told me that there's a 3%/$5 min..per charge. Obviously, it will change my use of the CC.

            Check your own agreement; which has probably been changed recently.

            For me, the $5 extra charge is a 10% hit on a $50 restaurant bill(worse on smaller bills). I'l just buy pesos.

            3 Replies
            1. re: 9lives
              BobB RE: 9lives Dec 10, 2008 06:01 AM

              That's weird. I travel internationally quite a bit and have seen a percentage added to all bills the last couple of years, but never a flat minimum charge at all, let alone one as ridiculously high as $5. You might look into changing credit card companies.

              1. re: BobB
                9
                9lives RE: BobB Dec 10, 2008 03:08 PM

                After reading your post, I figured I should call MC again..and recheck.

                I was mistaken. The agent told me that the $5 min only applied to cash advances. The previous agent had explained it wrong.

                That makes a big difference in how I' will use the card.

                1. re: 9lives
                  q
                  queencru RE: 9lives Dec 11, 2008 04:45 AM

                  I got a $10-12 charge on an $88 bill sometime last year. I think some credit card companies really gouge you. I chose not to use that card the entire rest of the time I lived abroad.

            2. viperlush RE: Ferrari328 Dec 10, 2008 07:49 AM

              Is this why I am seeing so many places in Cambridge/Boston that are cash only? I don't know if because I just didn't notice it in Baltimore and NoVa, but it seems like there are a lot of places up here that are cash only compared to what I am use to. It really has changed my eating/drinking habits since I rarely have cash on me.

              6 Replies
              1. re: viperlush
                BobB RE: viperlush Dec 10, 2008 07:59 AM

                Yeah, pretty much. Mostly these are places where the typical bill is pretty small (Anna's Taquerias come to mind) and the fees hit them harder. I wouldn't think this is more prevalent in the Boston area than anywhere else though, as far as I know credit card fees are the same across the country.

                1. re: BobB
                  viperlush RE: BobB Dec 10, 2008 08:42 AM

                  Right, I too assume that the cc fees are universal. The OP's mention of "hulabalo with the new parking meters" that got me thinking that maybe Bostonians/Cantabrigians are more "aware" when it comes to things. Between the recycling rules and the "You don't need a bag do you?" at stores it seems like a different world up here sometimes. And it could also be my luck that I only came across one restaurant in Bmore that was cash only, while here it seems like every other restaurant is cash only (exaggerating).

                  1. re: viperlush
                    jgg13 RE: viperlush Dec 11, 2008 07:28 AM

                    re: the "You don't need a bag" line. What I find funny is that they always ask me that when I *do* want a bag for whatever reason, but never on the times when I don't actually need a bag. Just one of those things ... :)

                2. re: viperlush
                  Sal Monella RE: viperlush Dec 10, 2008 10:24 AM

                  Anyone know of or have experience with resto's accepting debit cards? Just as good as cash and w/o the cc overhead?

                  1. re: Sal Monella
                    p
                    purple bot RE: Sal Monella Dec 10, 2008 08:19 PM

                    I'm told the fees for accepting a debit card are actually higher. Apparently (and correct me if I'm wrong) they have different tiers of charges for cards, rewards cards, etc. -- with debit and, of course, amex being the highest. who knows why anyone takes amex if what i hear is true. If I owned a small biz I definitely would not take amex.

                    1. re: purple bot
                      j
                      Jase RE: purple bot Dec 10, 2008 08:37 PM

                      As with most of this discussion, I think it depends on the business. A lot of companies have the corporate amex. If you're a small business with lots of corporate customers such as catering, gift baskets, etc, you'd want an amex account. .

                3. t
                  treb RE: Ferrari328 Dec 10, 2008 02:26 PM

                  If I'm close on the tab and they question the under $10 min, I usually say it'll be over 10 with the tip included. If a place takes CC's there's not supposed to be rules like that. I always assume the fee is built in to there cost structure.

                  1. trufflehound RE: Ferrari328 Dec 10, 2008 03:59 PM

                    The merchant pays for any transaction, credit or debit. The more security, such as pin or zip code, as well as transaction amout reduces the fee. Also, corporate cards cost more.
                    As those VISA ads show show, you slow everybody down when you pay cash. BULLCRAP. The fact is that the CC companies make $$ and we and the merchants pay$$. Sooo.get with it and next time they ask you if you want $$ back, say yes I'll take $40, put 420 in your wallet and $20 in your pocket. It's pretty hard to make a buck right now.

                    1 Reply
                    1. re: trufflehound
                      Prav RE: trufflehound Dec 10, 2008 04:07 PM

                      ??

                    2. s
                      Sal Vanilla RE: Ferrari328 Dec 10, 2008 10:26 PM

                      The merchant fees can be really high (like 3% per transaction) if the restaurant does a lot of little charges (versus fewer larger ones). If your margin is thin, that may where you choose to save. Restaurants should let patrons know ahead of time (clearly) about their charge policies. FYI -breakdown of money outlay: generally the credit card issuing bank gets a cut, the restaurant's account provider gets a cut and the card association (like Visa or Discover) gets a cut. Some restauranteur's (such as yours) may simply lack marketing finesse.

                      1. Midlife RE: Ferrari328 Dec 10, 2008 10:50 PM

                        I'm sure Merchant Services agreements vary all over the place, but I can verify that many include BOTH a percentage charge as well as a separate flat transaction fee to the merchant. Imagine the following when a customer wants to use a bank check card as a credit card (many banks actually suggest it to their customers as a way of safeguarding transactions): the % rate can be twice what it would be if the card were used as a debit card. Example: customer uses a check card to buy a $5 item and insists on it being run as a charge transaction - the merchant will pay $.25 or so for the transaction PLUS as much as 4%+ of the transaction amount. That can be as much as 45 cents on a $5 transaction. Not too many small business can really afford almost 10%. In a business that has a high percentage of small dollar amount transactions it can be crippling. It's a tough choice for the merchant who needs to take plastic to do business and I'm sure that's why they do what they can to discourage it.

                        11 Replies
                        1. re: Midlife
                          h
                          harryharry RE: Midlife Dec 11, 2008 04:55 AM

                          Was just going to say that - I get people in my shop trying to charge a cup of coffee on a debit card - I pay a flat transaction fee and a percentage - sometimes I just give them the coffee because it ends up costing me money to charge it!!

                          I never had a min. before, I am going to start now & for my really big orders, when i manually enter the card number, the rate goes way up - I'll add that in too, to the price of the food.

                          Credit card companies are making a lot more than small business owners.

                          Be mindful of all the hands that are getting money from your $5 charge - amex/mc/v & the processing company, and the staff, and the vendors and the landlord - and then the owner gets to have a little bit!

                          1. re: harryharry
                            c
                            cstr RE: harryharry Dec 11, 2008 06:52 AM

                            HH, doesn't the CC cost smooth out when you have parties with larger charges? If I had to consistently take a hit on CC fee's, if my margins were so close, I might opt for cash only.

                            1. re: cstr
                              h
                              harryharry RE: cstr Dec 11, 2008 07:06 AM

                              Unfortunately, no - in addition to catering, I supply specialty products to chefs - frequently they never come into the store and the cards they use are from international banks - not only do both of these issues raise the rates, but the charges frequently get flagged by the security departments and I have to wait an extra five days or so for the money to get to my account - I've decided not to look at the statements very often - or I would get really pissed off - and I have some of the lowest rates available (or so I'm told).
                              Sorry for the grumpy - I'm also dealing with an insurance company that doesn't want to cover $2600 of spoiled food due to a broken freezer - even though I've been paying for spoilage coverage for five years!!! I'm not feeling very generous about "the man" right now!

                              1. re: harryharry
                                RShea78 RE: harryharry Dec 11, 2008 08:30 AM

                                ""Sorry for the grumpy - I'm also dealing with an insurance company that doesn't want to cover $2600 of spoiled food due to a broken freezer..."

                                Any legitimate reason why?

                                1. re: RShea78
                                  h
                                  harryharry RE: RShea78 Dec 11, 2008 12:34 PM

                                  I say no, but they say I've been paying a lower premium because I agreed to have a maintenance contract on my freezers/fridges - I wasn't aware of this agreement - have had the fridges maintained but no contract - so we'll see what happens! I'm feeling a bit less pissed off now - Live and learn!!

                                  To answer JGG13 below - I can turn down the sale without breaking any agreement - If I'm loosing money on credit card charges below a certain amount, then it's smarter for me to just turn down the sale (which hopefully won't happen too often) I might loose a few sales because of this, but not enough to worry - and I'll always make exceptions for regulars. One thing I have learned in the past several years, is that you can't run a successful business by following every single rule that is set out before you - I hate that lesson because I like to do things by the rules.

                                  1. re: harryharry
                                    jgg13 RE: harryharry Dec 11, 2008 01:39 PM

                                    Are you sure that's true? My understanding is that at least with the major CC companies, that businesses are not allowed to have a minimum for charges, even if it ends up screwing them.

                                    1. re: jgg13
                                      h
                                      harryharry RE: jgg13 Dec 12, 2008 04:23 AM

                                      Do you work for the cc company ;-) !!

                                      1. re: harryharry
                                        jgg13 RE: harryharry Dec 12, 2008 06:49 AM

                                        No, but I have a CC and part of the agreement that I have as a consumer is that places will always accept it the same as cash. Look, I feel your pain but you can't have it both ways. Either it's not worth it to you to fund the crappy small little payments and you don't accept CCs, or you bite the bullet and deal with the small payments as part of your overall cost/benefit.

                                        1. re: jgg13
                                          h
                                          harryharry RE: jgg13 Dec 12, 2008 06:55 AM

                                          Let's drop this - we clearly disagree.

                                          1. re: jgg13
                                            RShea78 RE: jgg13 Dec 12, 2008 10:34 AM

                                            In many States an owner/manager/server/etc.- can refuse service to anyone, and/or set a minimum order requirement. In such situations a CC agreement doesn't matter. Rights come before agreements...

                                            However, denial of service should be documented for all concerned parties.

                              2. re: harryharry
                                jgg13 RE: harryharry Dec 11, 2008 07:27 AM

                                "I never had a min. before, I am going to start now "

                                Uhh, doesn't that break the rules of the agreement that you signed?

                            Show Hidden Posts