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Aug 12, 2010 12:43 PM

Restaurants that require minimum for debit/credit card payments

Does anyone know if it is legal for businesses in California to demand a minimum purchase before they will accept your debit or credit card?

Don't want to shut down a good Chow source just keep them honest.


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  1. All businesses can put minimums on charge cards, It is a way of limiting high CC fees on nuisance charges. Businesses can offer different prices for cash sales vs.

    22 Replies
    1. re: ospreycove

      According to "Purchase amounts: Merchants cannot impose minimum or maximum purchase amounts for credit card transactions." It is considered a minor transgression.

      1. re: wolfe

        It may violate their contract, not state or Fed law.

        1. re: ospreycove

          That's it. I'm not sure that I want the government to legislate to that level. The state credit card police tagging a store for minimum purchase requirements.

          1. re: ospreycove

            Yes, I think there have been a few posts on CH about this in the past.

            Personally, if the minimum credit card charge is reasonable (< $20), I don't see what the big deal is. Restaurants generally operate on very slim margins. I wouldn't feel right about putting a $5 lunch special on a credit card. I know there are posters who feel that "rules are rules." I just don't see it that way.

            1. re: Miss Needle

              Not that it's relevant to California law, but in NYC, minimums have been illegal for a while. (I think by local rather than state law but I don't remember at this point.) For a while they were enforcing it strictly at all levels, but seem to have backed off from smaller merchants. These days, I rarely see a customer argue over what are generally reasonable minimums, but I've also never seen a merchant refuse a charge when "reminded" of the law.

              1. re: Miss Needle

                I agree with Miss Needle, especially in this economy and it's a local restaurant.

          2. re: ospreycove

            Is a cup of coffee a nuisance charge? I see people at Starbucks charging coffee all the time.

            1. re: monku

     Starbucks margins they are more than structured for petty charges.

              1. re: ospreycove

                It's a nuisance for me waiting behind someone like that (ha ha)....what people don't carry around a couple bucks for a cup of coffee these days?

                1. re: monku

                  Plenty? Probably at least 20-25% of the people I know don't routinely carry cash, or just carry a twenty or something for emergencies. And it doesn't take any longer to swipe a debit card than to hand over cash and have the cashier pull out the correct change. Or, God forbid, have the customer decide *they* want to pay with correct change and then spend 5 minutes digging around for those last couple of pennies. I'll make an effort to use cash at smaller places but I have zero remorse about debiting at Starbucks and it doesn't bother me if the people in front of me in line want to as well.

                  1. re: ErnieD

                    This issue is not about "The 20-25% of the people who don't carry cash. It is about a business decision of the OWNER. The Owner decides what is good or not good for his/her business. If his/her decision proves to be detrimental to the business; so be it , it was the OWNERS decision.
                    Having said that Starbucks business model is built on high turn rapid transaction time. That is Starbucks decision,they still have crappy coffee!!!!!!

                    1. re: ospreycove

                      Well, of course it is the decision of the owner, but the fact that some people don't carry cash has to factor in. I don't have any idea what percentage of people actually don't carry cash-I was giving a wildly general guesstimate of my self-selected acquaintance. But I usually don't, so if an establishment requires I'm going to skip it for any kind of impulse stops. I don't hold a grudge or think they're doing the wrong thing; I just don't go there unless what they serve is good enough to warrant a second stop. I was just responding to the monku implying that everyone has cash and that it takes longer to swipe a card than to pay cash-neither one of these are true in my experience.

                      I agree with you about Starbucks coffee for the most part. But they have wireless and there's one right down the street from where my stepson get out of football practice at a highly variable time every day. So it's a choice between there, a grocery store, or the parking lot in 108 degree heat for the wait, which highly increases it's appeal :)

                      1. re: ospreycove

                        You are correct. It is up to the owner, to decide what the payment methods will be. If they limit that to cash, and then fail, there is a lesson to be learned. If they limit to cash, and succeed, then they have enough patrons, who carry the cash in their pockets.

                        Now, besides a cache of credit cards, I also carry between US$400 and 600 in cash. However, I hate to be limited.

                        Had a recent event at a major, local resort, where I wanted to purchase wine for the table that I was hosting. I looked over the wine list, and made my choices. I handed the waiter my AMEX card, only to be told, "we only take cash for wines." Well, as I was about to buy US$1500 in wine for my table, I told her to cancel that order, and we'd get by with the event wines.

                        Had similar at an event with a non-hosted bar. When I handed my credit card to the bartender, I was told that it was too much trouble for them to process a credit card, and they would only accept cash. I paid for my four guest's drinks with my cash, and promptly canceled three events at that resort. In the end, I would guess that they lost about US$150,000 in business, due to that policy. Just saw that they were in receivership. So, while the owner does make the rules - the patrons vote with their pocketbooks - or their credit cards, as the case might be.


                        1. re: Bill Hunt

                          When a restaurant/Bar gets in financial trouble, one of the first things to go is credit card acceptance.
                          If the establishment accepts and processes the card. the net amount is credited to their bank account. Under the Uniform Commercial Code Article 3 (US LAW) a bank may set off a customer's funds if the customer has defaulted on a loan. So if the restaurant is behind on payments to the bank, the bank can grab the dposit and leave the resaturant unable to pay wages or suppliers.

                          A restaurant in trouble will take the cash and pay the employees in cash and pay vendors (who likely have cut off credit) in cash in order to keep operating in the futile attempt to save the business.

                          An establishment who stops taking credit cards has the smell of a sinking ship and should be avoided. Quality will suffer, as supplies are obtained whereever possible.

                          1. re: bagelman01

                            Also known as "Never keep a bank account at the bank that holds the mortgage on your house" theory from finance / banking 101.

                            1. re: jfood

                              not even for the extra 1/4% savings on the rate...

                              I do, but just transfer in the amount of the payment 2 days before the mortgage is ude. I've also never been late, so no setoff can occur.

                              Restarantuiers, However, are notoriously bad credit risks..........

                        2. re: ospreycove

                          of course, that owner decided to accept credit cards and part of that was accepting the terms the CC company lays out, which prohibits minimum charges.

                          1. re: jgg13

                            even if that is true and part of the contract with the CC company I personally think wherever possible we should try to help small businesses by paying cash for under $10. They lose a percentage of the sale AND a one off swipe charge. Small businesses often have a higher swipe charge and are less able to negotiate a good percentage charge. I think Discover is 5% and around 50-75c for every swipe.

                            1. re: smartie

                              See downthread - it is very recently no longer true.

                              In a hypothetical world where what I said was still true - if you want to help them out, feel free, but htey shouldn't be allowed to intentionally break the rules like that. IOW - you might be correct that the right thing to do is to pay cash, but they also should not be posting minimums. It's all academic now anyways.

                      2. re: monku

                        I never pay cash for coffee.

                        It's in fact faster (at Starbucks anyway) for the barrista to swipe and return your card than to take your money and punch in the price in the register and give you change back (or to sort through the money if you give exact change). With a credit card, you don't even need to sign anymore.

                        1. re: monku

                          Just my own personal experience as a cashier - a substancial number of people swipe their card for a single pack of gum, a bottle of soda, or even a single lollipop.

                          I myself don't often have cash on me during the school semester because my work and school hours greatly impair my ability to get to the bank within their open hours.

                    2. That's easy, then.

                      If they are a good Chow source, then play by their rules. Why shut down a good place over a rule like this? Pretend they are cash only and enjoy!

                      1. They're allowed to do this.

                        Previously, it was against their merchant agreement to do this, and you could call MasterCard/VISA to complain.

                        However, with the new credit card act that was passed in Congress and signed into law, they're more than allowed to do this now.

                        2 Replies
                          1. re: tzurriz

                            Yeah, the new rule (Durbin Amendment if you're particularly interested) also allows them to charge different (read: less) amounts if you use debit as opposed to credit. It does NOT allow them to charge different amounts for different credit card companies, e.g. Visa vs. AMEX.

                            Also, the highest the minimum can be is pretty low, something like $10 under the new rule, but don't quote me.

                        1. First, I am not an attorney. I am also not a resident of the state of CA, so this is just my opinion, and little more.

                          I have no issue with furnishing my credit card, when making reservations to most restaurants. I think that they need some sort of commitment, and am happy to furnish that.

                          Now, I know many, who will make reservations at a half-dozen restaurants, and decide at the last minute. Many will just stiff the restaurants, that were not chosen. I feel that this is in bad taste, and will call internationally to cancel, if I cannot dine there. That is my choice.

                          When I do make a reservation, that is my bond, and I do not mind a card being taken. If I cannot make it, I fully expect to pay a cancellation fee, and gladly admit that, when I cancel. Restaurants are designed to make money. If I deny them the opportunity, I need to cover my cancellation.

                          Just personal observations, with no legalities involved.

                          Good luck,


                          1. I don't mind this practice as long as it's well posted. Some low volume restaurants have horrible contracts with credit card companies and may be paying a percentage of the transaction and a flat fee of up to $3 for each transaction. I wouldn't allow credit cards for small purchases if that were the case in my restaurant either.