Did anyone else know this?!

[TheMonarch]

I just found this out earlier this week regarding VISA cards:

So the whole $5 minimum purchase amount is BS, and they are supposed to accept my VISA card no matter what.

Ohh, and get this:

So why the hell is up with merchants charging people for using their VISA card?! If only I knew this sooner. I've been charged as much as $1.50 for swiping my freakin' card on their damn machines.

Where did I get this info? VISA http://usa.visa.com/download/busine..._risk_management/rules_for_visa_merchants.pdf

Anyone else a little pissed?

 

[CorvusCamenarum]

I don't know the ins and outs of it, but I'm guessing it has something to do with Visa charging merchants a percentage of the sale for being able to accept the card. Depending on the purchase amount, a merchant might actually lose money on the transaction when a customer pays with plastic.

 

[SamIchi]

I've never been charged for using my Visa, or denied.

 

[OnceUGoMac]

Yeah, companies aren't supposed to have minimums. If it's a problem, contact that merchant's processing company and they'll warn them. After too many warnings, the merchant will be dropped and they won't be able to process credit cards. I found this out through my friend who works for a processing firm. Good to know.

 

[tweakers_suck]

Yeah, companies aren't supposed to have minimums. If it's a problem, contact that merchant's processing company and they'll warn them. After too many warnings, the merchant will be dropped and they won't be able to process credit cards. I found this out through my friend who works for a processing firm. Good to know.

A friend of mine used to work at company that leases the equipment. I learned that from him. I was vigorously denied by a merchant one time regarding the rule, but they eventually caved in. I think it was like an $8 purchase.

The only time a fee can be charged is if you use a debit card. Fees are allowed with their use.

 

[mgargan1]

Stupid restaurant just told me that they have a $15 minimum delivery charge... I would call them out on it, but i don't want them to spit in my food.

 

[WildCowboy]

Stupid restaurant just told me that they have a $15 minimum delivery charge... I would call them out on it, but i don't want them to spit in my food.

Nice thread resurrection.

Their minimum charge is because it's delivery...it has nothing to do with the credit card, so there's nothing to call them out on. They're not going to incur the costs involved in driving to your house unless it's financially reasonable for them to do so.

 

[swiftaw]

Stupid restaurant just told me that they have a $15 minimum delivery charge... I would call them out on it, but i don't want them to spit in my food.

Well, that's different. They are completely entitled to set a minimum delivery charge.

 

[SpookTheHamster]

They can have whatever minimum they like on a delivery. Would you drive all the way to somebody's house to deliver some 99p spring rolls?

However, if you tried to buy those spring rolls INSIDE the take away, they have to let you do it on a card.

 

[panoz7]

My parent's own a business. They accept credit cards. For certain purchases under $5.00 the processing fees for the credit card eats up most of the profit and with certain items can actually cost us money.

Businesses technically aren't allowed to charge you anything to use your card or impose a minimum amount... however, in NC at least, we are under no obligation to sell you something, whether you are paying with visa or not. If you're nice enough my parents will usually run the card anyway... otherwise, tough luck.

BTW, for those of you who feel that visa is protecting your rights as a consumer... they're not. They're only trying to maximize their own profit. Instead of demanding that a business allow you to run your card and reporting them to VISA you might consider carrying a little cash around... I know it can be inconvenient but it can really save local businesses (like my parents who can't negotiate rates with VISA due to their comparatively small size) a fair bit of money.

 

[Leareth]

My parent's own a business. They accept credit cards. For certain purchases under $5.00 the processing fees for the credit card eats up most of the profit and with certain items can actually cost us money.

Businesses technically aren't allowed to charge you anything to use your card or impose a minimum amount... however, in NC at least, we are under no obligation to sell you something, whether you are paying with visa or not. If you're nice enough my parents will usually run the card anyway... otherwise, tough luck.

BTW, for those of you who feel that visa is protecting your rights as a consumer... they're not. They're only trying to maximize their own profit. Instead of demanding that a business allow you to run your card and reporting them to VISA you might consider carrying a little cash around... I know it can be inconvenient but it can really save local businesses (like my parents who can't negotiate rates with VISA due to their comparatively small size) a fair bit of money.

You raise a good point and from personal experience. For small businesses I actually do pay cash , it when the 7-11 or Mac 24 hour store refuses to let me pay for my slurpee and chocolate bar with my credit card at 2 am because the bank is still closed and I just came off work and cannot deposit my paycheque...
what really irritates me are the stores that wont accept credit cards for under X amount and then tell you to do a cash advance on their ATM machine.

 

[dogbone]

Would you drive all the way to somebody's house to deliver some 99p spring rolls?

Depends. How many springs rolls did you have in mind?

 

[panoz7]

what really irritates me are the stores that wont accept credit cards for under X amount and then tell you to do a cash advance on their ATM machine.

That bothers me as well. There's a shopping center in a town near mine that no longer accepts credit cards in any of the stores... some of the stores don't take checks either. I can understand this for a $5 purchase but I don't plan on using the ATM they have in each store to pick up $40 worth of Chinese takeout... shame they have the best chinese food in the area or I wouldn't be their customer anymore.

As a consumer the best way to cause any change is to vote with your money. If you don't like a policy in a certain store don't buy from them anymore and let them know why. As I said, with our own store if customers are polite and reasonable we'll usually run their card anyway... if they're not, then we don't want them as customers, and we certainly don't want to be loosing money on their sale.

 

[mkrishnan]

BTW, for those of you who feel that visa is protecting your rights as a consumer... they're not. They're only trying to maximize their own profit. Instead of demanding that a business allow you to run your card and reporting them to VISA you might consider carrying a little cash around...

Yes, because forcing me to carry cash around is a real protection of my rights as a consumer. Thanks for being my champion.

 

[MacNut]

Is it that much easier to charge something for $5.00 then to just pay cash.

 

[WildCowboy]

Is it that much easier to charge something for $5.00 then to just pay cash.

Haven't you seen the new VISA add in the finely-tuned deli where the guy tries to pay cash and the whole operation comes crashing down?

 

[MacNut]

Haven't you seen the new VISA add in the finely-tuned deli where the guy tries to pay cash and the whole operation comes crashing down?

Ha, Ya, I guess its better then charging that Big Mac at the drive thru.

 

[WildCowboy]

Ha, Ya, I guess its better then charging that Big Mac at the drive thru.

Credit cards at fast food drive-thrus...best development ever. Makes it so much easier than having to fumble with bills and coins while hanging out the car window. Plus, you can get cash back on the rewards cards...brilliant.

 

[mkrishnan]

Makes it so much easier than having to fumble with bills and coins while hanging out the car window.

I think they like it for the same reason, actually. I was skittish at first but now I always do that.

 

[panoz7]

Yes, because forcing me to carry cash around is a real protection of my rights as a consumer. Thanks for being my champion.

Visa's policies are for their own benefit. Coincidentally this policy might help consumers like yourself who don't prefer carrying cash, however that's not visa's primary intent... they benefit greatly from forcing stores to run inexpensive purchases.

I just spoke with my father to find out how this all works. Admittedly our store is not typical and this might be different for other stores, especially larger ones who can negotiate with visa.

In our case we pay a flat percentage on every purchase regardless of cost. So hypothetically given a 1% rate a $5.00 purchase might cost us $.05 and a $500 purchase would cost $5.00. That makes sense, and if that was all that mattered we'd be happy to accept cheaper purchases.

Unfortunately that hypothetical 1% rate isn't set in stone. It's based on the average transaction amount... the lower the average transaction amount (i.e. more $5.00 purchases) the higher the rate. If you only sell cheap things, and most of your purchases are going to be small that's fine... you can compensate by raising prices a small amount.

In our store (and probably in some of the other stores that have similar policies) the average transaction rate is relatively constant but the minimum and maximum transactions differ significantly; one sale may be a greeting card for $2.25 and the next might be lighting for $6000.

If we were to allow people buying a single greeting card for $2.25 to use their card our average transaction rate would drop significantly and the flat rate we pay would go up. We could compensate by charging $2.40 for the card. That would be enough to cover the difference. We can't however charge $7000 for the lighting... small transactions can result in very large costs for larger purchases.

Basically we'd be fine if all we did was run $5.00 or $10.00 transactions. Then we could just raise prices a little bit... in our store we can't do that though. Raising the cost of a card by 5% will not cover the lost revenue from the lighting sale.

Does that make sense? If visa really cared about consumer rights they wouldn't penalize stores so much for cheaper transactions, or, like a debit card, they could charge a flat rate for larger purchases. For example, if you were to pay for that hypothetical $6000 lighting purchase with your visa it might cost our store around $300 to run your card... but use your debit card, and it costs us around a dollar.

 

[CanadaRAM]

And, the merchant discount rates vary between 1.75% to 4% or more, depending on volume and the bank you are with. There are extra charges above that for taking corporate cards, foreign cards, or online transactions. AmEx is the worst, we don't take it because of the high fees. Where do you think Visa gets the money to give you cash back or airline miles on each purchase?

What panoz didn't spell out is this:


Company has a 1.7% rate, going up to 2.5% if they don't make a minimum average invoice for the month.

The $6000 fixture would cost them $102 in charges with an average invoice size of $6000. Fair enough.

But if they sell 20 more customers a $2.25 greeting card each, the average invoice for the 21 customers falls to $287.86, let's say below the $300 average needed for the 1.7% rate: so now they pay $150 discount on the fixture. Taking the 20 customer's small items on Visa cost the company $48.06 in fees, or $2.40 per customer, more than the total amount of those sales.

Also, the merchant pays the charge card fees on any taxes collected, and on any external charges such as delivery. And what happens when you bring something back for a refund? Most of the time, the merchant cannot get back the fees on the original sale; even though the money was refunded to your card, Visa/MC doesn't refund the fee.

PayPal BTW charges 2.9 - 4.9% plus $0.50 per transaction, (depending on the plan you are on) plus an additional 2.5% commisssion when they change currency (overtop of the sell exchange rate which is already bumped over the official rate)

 

[panoz7]

What panoz didn't spell out is this:...

Thanks CanadaRAM... that's what I was trying to say, you're just, ummm... better at it.

 

[siurpeeman]

A friend of mine used to work at company that leases the equipment. I learned that from him. I was vigorously denied by a merchant one time regarding the rule, but they eventually caved in. I think it was like an $8 purchase.

The only time a fee can be charged is if you use a debit card. Fees are allowed with their use.

yes, i kept getting charged whenever i used my debit card to get gas. now i use credit.

 

[Abstract]

And, the merchant discount rates vary between 1.75% to 4% or more, depending on volume and the bank you are with. There are extra charges above that for taking corporate cards, foreign cards, or online transactions. AmEx is the worst, we don't take it because of the high fees. Where do you think Visa gets the money to give you cash back or airline miles on each purchase?

What panoz didn't spell out is this:


Company has a 1.7% rate, going up to 2.5% if they don't make a minimum average invoice for the month.

The $6000 fixture would cost them $102 in charges with an average invoice size of $6000. Fair enough.

But if they sell 20 more customers a $2.25 greeting card each, the average invoice for the 21 customers falls to $287.86, let's say below the $300 average needed for the 1.7% rate: so now they pay $150 discount on the fixture. Taking the 20 customer's small items on Visa cost the company $48.06 in fees, or $2.40 per customer, more than the total amount of those sales.

Also, the merchant pays the charge card fees on any taxes collected, and on any external charges such as delivery. And what happens when you bring something back for a refund? Most of the time, the merchant cannot get back the fees on the original sale; even though the money was refunded to your card, Visa/MC doesn't refund the fee.

PayPal BTW charges 2.9 - 4.9% plus $0.50 per transaction, (depending on the plan you are on) plus an additional 2.5% commisssion when they change currency (overtop of the sell exchange rate which is already bumped over the official rate)

Since CanadaRAM is always right, CanadaRAM is right this time, guys and gals. Sorry.


And I guess I'm the only person in the world who still uses cash. I use my credit card for major purchases, or at least semi-expensive purchases. However, not for these el cheapo $2 purchases. I think that's going a bit far.

I'm also afraid of credit card fraud or something, so I never use a credit card at a restaurant. I know MC and Visa will return the money to you if you get ripped off by someone, but it takes a long time and is a hassle, so I stick to cash for most of my everyday purchases.

 

[mkrishnan]

I do understand the argument regarding fixed overhead costs and the costs of transactions, don't get me wrong.

And I also understand that Visa and others are fairly ruthless to small businesses.

All I personally was saying was that, whether or not I have any regard or concern for your small business, for a small business to say to me that Visa is not guarding my interests as a consumer and that it is somehow an action in favor of my own interests to carry cash so that said small business can not adopt Visa is like the pot calling the kettle black.

Visa is out for its own interests.
Your small business is out for its own interests.
I am out for my own interest.

And when I find it, I generally plan on expecting to be able to pay for it with plastic.

Where a business offers me such a great proposition that I would rather pay it cash than pay someone else with plastic for the same service, I'm willing to compromise my convenience. But again for my own interests. Not for theirs.

Deal with it.