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Sep 23, 2011 10:19 PM

Minimum $10 Credit Card charge? Legal or illegal?

I owned a Chinese restaurant(Boston). But it so annoying that people have to use a credit card when their price come to under $10. Lets say $6, 7..etc. I already have a sign said in the restaurant or menu.

Why i hate credit card under $10, i have to buy credit card paper, Take alot of time for each transaction, too much fraud.

Anyway Is this legal or illegal? some customer said it is illegal.

But my response to him.. " it is not illegal since small business such as restaurant have their own policy"

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  1. In the recent past visa and mastercard did not allow merchants to impose a minimum for credit cards, but I believe it now is it's permissible.

    1. i have often seen this policy at small ethnic groceries. (Reliable Market has it and they're not little.)

      1. Before the $10 minimum wasn't legal and I'd b1tch about it. However the new financial reform bill did away with that so it's ok now.

        1. It was never illegal, but it violated the terms of merchants' agreements with card companies. A recent law, however, allows merchants to reject cards for sales under $10 regardless of what those agreements say.

          10 Replies
          1. re: Luther

            ^^^ This.

            My approach would be to request the customer pay in cash ("sorry, but we ask for a $10 minimum on credit cards. We'd really appreciate it if you could pay with cash if possible" or something like that) and if the customer still asks to pay with a CC, don't fight it. Most will probably respond to the request, and you'll avoid angering those that don't. If you still get too many credit card users, I guess you'll have to be stricter.

            1. re: emannths

              perhaps a 1.00 surcharge would solve this problem; you get discounts at some gas stations for cash.

              1. re: cambridgedoctpr

                That also used to be against the CC agreements that merchants signed. Since now neither are against the agreements, they might as well impose a minimum.

                Back in the day I'd call in and complain about merchants who had minimums now and then. I don't think it had any effect but one never knows. In theory they could have lost their credit card capabilities.

                1. re: jgg13

                  So someone wants to put a $3 coffee on a discover card.....$0.35 cost per transaction.....more than 10% of the profits down the drain......yet you still think you are entitled to use your plastic?

                  1. re: joe777cool

                    Yes, the customer is always right.....even when they are wrong.

                    1. re: HoosierFoodie

                      haha thats a good one! If I let every customer be right when then were wrong my restaurant would go out of business and that is a fact.

                      "Yes of course I am entitled to me senior discout on top of the other 2 discounts I am already receiving."

                      "No you DO carry x product, I saw it in a commerical the other day."

                      The customer is not always right, but they are still the customer.....they will be treated as a customer, with respect and dignity, but the line must be drawn.

                      1. re: joe777cool

                        Some people get overclocked when it comes to bargains, and spin on out into ultra-tacky mode and never think about the business. I'd never, ever have reported a small business for either a small surcharge or a minimum. If it was, say, Fleming's or P.F.Chang's I sure as hell would have, but not a local business. cripes, it's hard enough for a local business to make a living these days.

                        1. re: joe777cool

                          totally agree.

                          Last night a customer order 2 items on the phone for pick up, i told her the price with tax is $8.95. Guess what. She said she paid only $8.25 on 2day ago. I did the calculation again to make sure i was right. It come out to be the same $8.95.

                          I told her it could be one of my Co-worker miscalculated the price. Finally she didn't say anything..

                      2. re: joe777cool

                        These days? No. Before that law was passed - yes. The vendor signed a contract with the credit card companies which said that htey would accept plastic for *all* transactions. If they didn't want that they shouldn't have signed the contract.

                        I should note that this is largely academic for me as I primarily use cash - for all of the people who claim it is faster to use plastic, in my experience that's not the case.

                      3. re: jgg13

                        These transactions cost merchants money. I would never complain about such a thing and possibly risk a business's ability to take credit cards! Who are you really hurting there? Who are you really helping?
                        I am all for a minimum amount when you are going to use plastic. After all...if businesses are going to incur extra costs..then who do you think is going to pay?? If a business has to raise costs it affects everyone.

                2. If my understanding is correct, the fee structure for merchants is lower for debit card purchases, so perhaps a combination of credit/debit might be a better solution.

                  While I understand it from a merchants perspective, I tend to avoid any business that wont take a debit/credit payment - especially when they then direct you to their own ATM that tacks on a $2 or $3 surcharge for your withdrawal - generating additional revenue (albeit a minor amount per transaction) for the establishment.

                  Aznmask: What about just factoring your additional 3% of credit surcharges into the price of each item, just making the $7.95 dish cost $8.25? You'll make a little more on each sale and you wont have to fight with your customers.

                  3 Replies
                  1. re: mikeinboston

                    I would rather NOT use my credit card for small transactions. It's no big deal for me to draw cash once a week and pay for coffee or drive through or a movie say, with cash. I know that merchants have to pay a swipe fee plus commission which is an extra cost to them. Plus my credit card bill would be full of small amounts to check over each month. I also worry about my card being cloned - it has happened numerous times to me so I try to use it as little as possible.

                    1. re: smartie

                      If going to a large corporate merchant I'll charge anything and everything. I want the miles. However, I'm especially mindlful about using it for small amounts at mom & pop places because I know that the minimum rates and charges they must pay are far greater. If they politely request I not use it for small puchases I generally comply, but if they strictly enforce a rule that really turns me off from the place. Sometimes I'm out of cash.

                      aznmask: In this country people use cards. I suggest you accept and embrace this fact. It's the cost of doing business as surely as is the utilities taxes and lease payments, and you probably don't want to alienate customers in this rough economy.

                    2. re: mikeinboston

                      surcharges to a customer might drive them crazy, WHY? I was thinking add 25 or 50cent. But i think it might be backfire.

                      Well my menu and a sign said $10 Minimum and they still go for it.. Sometime from those same customer, they just do it no matter what.

                      I usually don't argue with them and let them know for their future purchase that it is our restaurant policy to be $10 minimum.