We have all seen it– merchants imposing minimum purchase requirements on items paid for with credit and debit cards. Although this is common, it is against the merchant agreement of both Visa and MasterCard.

I received a phone call from my mother today asking if it was legal for store owners to impose these minimums for credit/debit cards. I told her I didn’t know the answer to that, but I said I would visit the MasterCard and Visa website to find out.

I first did a Google search and found out that although it’s not illegal to impose minimums per se, it is indeed against the merchant agreement of both Visa and MasterCard. Now I was intrigued. Why do some merchants do it? Do they know it’s breaking their agreement? Do they care? Do they think the public doesn’t know the guidelines? Whatever, it’s wrong.

Master The Moment

A quick view of the FAQ at MasterCard’s site will inform the customer:

Another MasterCard acceptance rule prohibits merchants that accept MasterCard cards from establishing any minimum amount below which the merchant won’t accept payment via MasterCard card.

The full FAQ can be found here.

A check of Visa’s help section devotes a portion to minimums:

Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge you a fee when you want to use your Visa card.

If you run into a problem like this with a merchant, please notify the financial institution that issued you your Visa card. These institutions have access to the appropriate Visa rules and regulations and can help you document and file your complaint. You’ll find their address and/or telephone number on your Visa statement. Their telephone number may also appear on the back of the card itself.

The full help section can be found here.

You Just Got Served

So what can we consumers do? Well, I for one will be challenging merchants who try to impose a minimum on myself, and I will use a handy little document that I created to enforce my position. This is a simple PDF file I created that reprints MasterCard and Visa’s guidelines.

I encourage everyone to download the document, print it, and serve any merchant with it. Want to militant on the issue? Hand these outside (on public property) the merchant’s establishment to customers.

In The News

The MSNBC website had a Q&A on this topic, titled: Surprise: Stores can’t set credit card minimum. Included below is the text from that page.

There are many convenience stores that charge small fees for using a debit or credit card when customers do not spend a certain dollar amount. For example, one store said they would charge me $0.75 if I used my Visa debit card to buy a soda, because I did not spend enough. I told the store clerk that she cannot impose a minimum purchase requirement when I used my Visa card and she simply laughed at me. Or was I wrong?
Keiko C.

You are correct. Merchants accepting Visa or MasterCard credit or debit cards are not allowed to set a minimum amount for using the card; that is a violation of the merchant agreement.
“People want to use their cards for smaller ticket transactions,” MasterCard’s Barbara Coleman tells me, and the credit card companies want to make sure they can.

Even so, as you found out, some stores try to impose a limit. What can you do? In your case, you can report the merchant to the financial institution that issued your Visa card.

You raised another interesting question. Can a merchant charge you a service fee for using a credit card or debit card? There is no federal regulation that prohibits this. The law that prohibited a surcharge on credit card purchases expired back in 1984. Both Visa and MasterCard allow a merchant to offer a discount to customers who pay by cash or check, but in most cases they say, a merchant cannot charge more for putting it on plastic — that would be a violation of the merchant agreement. I’ve asked the credit card companies for specific information about when an exception to this surcharge rule is permitted and I hope to write more about that in a future column.

Read the full text @ MSNBC

Project Expose

Now I’m going to be on the lookout for merchants who try to impose minimums. I will certainly write back here if I encounter any, and I will certainly submit my form to them.

Stay tuned, this could get interesting!