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Stores Violating their merchant agreement - 6/1/2006 12:36:23 PM   
Saint


Posts: 279
Status: offline 		I know the economy is bad right now, but how many people have come across a situation similiar to this where store owners blatantly rip off unknowing consumers? There are 3 stores in the town I live in that charge a minimum purchase amount when using a debit or credit card. The first store charges a minimum of 3 dollars, the second 5 dollars, and the third 10 dollars. At first I wasnt mad about it because I figured that they had that right. Then I got to thinking, that this is the same as someone telling me that I have to make a minimum amount purchase if I write a check. And to me, that is just plain wrong. The first store told me that everyone else was doing it, so they saw no reason why they shouldnt either. And that they were charged a fee per each transaction through the company issuing the equipment and that was why they charged a minimum amount.

So after that, I called my bank to confirm this because it didnt seem right to me at all. The bank in turn told me that no additional fees had ever come out of anyone using a debit or credit card during a swipe transaction with a store. After they told me that, they told me to call 1-800-visa-911 and confirm this. Before I did that, I was aware of the 2 other stores who charged a purchase amount to use your debit or credit card.

So I gathered their information; Name, street address, telephone number, and then called the visa number. After being connected, I asked whether it was legal or not for a store to charge a minimum purchase amount when using your debit or credit card. They confirmed that it was illegal and that it did indeed constitute a violation of their merchant agreement to those stores. Then I told them I would like to file a complaint and gave them all the appropriate information. They told me that they would send a copy of my complaint to my home address and that I should recieve it no later than 10 business days.

Okay, Im not a protestor or someone that normally likes to cause trouble for people. Normally I would have let this go by and shrugged my shoulders, but this got me to thinking. If they were doing this to me, how many others were they doing it to? How many thousands of dollars extra were these stores making by duping customers? The more I thought about it, the more angered I got.

Im just curious as to whether or not anyone else knows about this or about stores doing this to them at some point in time. To me, illegal is illegal and it doesnt matter if its a nickle or ten dollars. I guess I just wanted to throw this out here so that other people can look at it and know that things like this are illegal.

lol Not really a political thread or religious thread, but it is an economic one and so I posted it here. :) 
Profile   Post #: 1
RE: Stores Violating their merchant agreement - 6/1/2006 12:43:20 PM   
OhBeMyMind


Posts: 845
Joined: 11/19/2004
From: Panama City, Florida
Status: offline 		I have seen the same thing...but really never questioned it.  Some places even have signs up stating that you are charged X amount for using a debit/ATM card.
Interesting to find out that it is not legal.....kinda feel ripped off now. 

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(in reply to Saint)
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RE: Stores Violating their merchant agreement - 6/1/2006 12:44:33 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		Oh wow. Well- from a former cashier stand...we could more less insist on method of payment of our choice- as a merchant. If such was illegal is isnt enforced. Or wasnt.

I preferred not to have a register with a ton of cash. Robberies go up when things get tight.

A credit will cost the merchant. I did not think a debit did.

For a while I carried like no cash. But then it seemed credit or debit cards randomly go void-stopped-ect. So if you want the goods-ya gotta pay.

I am not really sure what a bank does. A grocer sells food. Gas station sells gas. But a bank...hmm.

Dump the bank, credit unions offer a better deal.

(in reply to Saint)
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RE: Stores Violating their merchant agreement - 6/1/2006 1:06:01 PM   
stef


Posts: 10215
Joined: 1/26/2004
Status: offline
quote:

ORIGINAL: Saint

I know the economy is bad right now, but how many people have come across a situation similiar to this where store owners blatantly rip off unknowing consumers? There are 3 stores in the town I live in that charge a minimum purchase amount when using a debit or credit card. The first store charges a minimum of 3 dollars, the second 5 dollars, and the third 10 dollars. At first I wasnt mad about it because I figured that they had that right. Then I got to thinking, that this is the same as someone telling me that I have to make a minimum amount purchase if I write a check. And to me, that is just plain wrong. The first store told me that everyone else was doing it, so they saw no reason why they shouldnt either. And that they were charged a fee per each transaction through the company issuing the equipment and that was why they charged a minimum amount.

If a merchant has a $10 minimum charge for credit card transactions, are you claiming that if you wanted to purchase $5 worth of goods, they would charge you $10?  Has this actually happened to you?

I think you might have gotten the wrong idea from the person you spoke to in the store.  Merchants have had minimum purchase prices for credit card transactions for quite a while now.  What this means is that your purchase has to be above a certain amount before they'll run it as a credit card transaction.  They don't pad out your purchase price if it falls below their minimum, they just won't allow the use of a credit card for that transaction if your total purchase is below their minimum.  This is not illegal.

~stef

< Message edited by stef -- 6/1/2006 1:27:07 PM >

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(in reply to Saint)
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RE: Stores Violating their merchant agreement - 6/1/2006 1:09:35 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		If this is a chain- why not send an email enquiring as to such. Ask them if this is corporate policy.
Keep us posted...

(in reply to Saint)
Profile   Post #: 5
RE: Stores Violating their merchant agreement - 6/1/2006 1:14:16 PM   
ArtCatDom


Posts: 478
Joined: 1/20/2005
Status: offline 		They're not duping customers. They pay a fee on every card transaction, whether credit or debit. That is why a lot of smaller stores may have an ATM but do not accept credit cards.

Having asked a lawyer (IANAL and it was not binding legal advice, just a personal opinion), there doesn't seem to be anything in law that precludes the practice of minimum purchases. Looking into federal law it doesn't seem to be illegal from what I can discern (again IANAL).

Also having looked at Visa's guidelines, I don't see anything prohibiting merchants from minimum purchase requirements.

The Rules for Visa Merchants is a PDF linked on the lower right:
http://www.usa.visa.com/business/accepting_visa/new_acceptance/merchant_responsibility.html?it=c|/business/accepting_visa/new_acceptance/index%2Ehtml|Merchant%20Responsibility

EDIT: Due to the way CM hadles the | character the URL will not post correctly. Please copy/paste.

*meow*


< Message edited by ArtCatDom -- 6/1/2006 1:17:05 PM >

(in reply to Saint)
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RE: Stores Violating their merchant agreement - 6/1/2006 1:34:06 PM   
JohnWarren


Posts: 3807
Joined: 3/18/2005
From: Delray Beach, FL
Status: offline
quote:

ORIGINAL: pahunkboy

Oh wow. Well- from a former cashier stand...we could more less insist on method of payment of our choice- as a merchant. If such was illegal is isnt enforced. Or wasnt.


It may or not be illegal under your state law but it is a violation of the contract with the card processing company.  I recently bought a motorcycle with my Discover Card and the seller wanted to tack on a fee equivalent to what they would be charged by the processor.  I said "fine" but then insisted that the fee be recorded on the bill as a credit card fee.  They went white and told me they'd forgive the fee.  They knew damned well if I contacted Discover, there would be a good chance that I'd get a refund taken out of their virtual hide and might even lose their credit card priviledges.

I used to run an internet company that used credit cards and I made it my business to read the entire agreement.

_____________________________

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(in reply to pahunkboy)
Profile   Post #: 7
RE: Stores Violating their merchant agreement - 6/1/2006 1:36:55 PM   
Moloch


Posts: 1090
Joined: 6/25/2005
Status: offline 		Internet Company ?  Care to Elaborate?

(in reply to JohnWarren)
Profile   Post #: 8
RE: Stores Violating their merchant agreement - 6/1/2006 1:44:28 PM   
Saint


Posts: 279
Status: offline
quote:

ORIGINAL: stef



I think you might have gotten the wrong idea from the person you spoke to in the store.  Merchants have had minimum purchase prices for credit card transactions for quite a while now.  What this means is that your purchase has to be above a certain amount before they'll run it as a credit card transaction.  They don't pad out your purchase price if it falls below their minimum, they just won't allow the use of a credit card for that transaction if your total purchase is below their minimum.  This is not illegal.

~stef


Im not sure exactly what your asking here. From what I was told by visa, no store can 'tell you' that you have to make a minimum purchase amount there. If you go to buy a candy bar for 90 cents, and they say their sorry but you need to make a purchase of at least 5 dollars to use their equipment, that is illegal according to the people I spoke with at visa international.

To confirm this, all you need to do is call 1-800-visa-911 and ask them if its illegal for a store to require a minimum purchase amount on a debit or credit card. I dont know the law or specific legalities, Im just going by what I was told on the phone by the person taking my information.

< Message edited by Saint -- 6/1/2006 1:46:47 PM >

(in reply to stef)
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RE: Stores Violating their merchant agreement - 6/1/2006 2:49:59 PM   
ArtCatDom


Posts: 478
Joined: 1/20/2005
Status: offline
quote:

ORIGINAL: Saint

quote:

ORIGINAL: stef



I think you might have gotten the wrong idea from the person you spoke to in the store.  Merchants have had minimum purchase prices for credit card transactions for quite a while now.  What this means is that your purchase has to be above a certain amount before they'll run it as a credit card transaction.  They don't pad out your purchase price if it falls below their minimum, they just won't allow the use of a credit card for that transaction if your total purchase is below their minimum.  This is not illegal.

~stef


Im not sure exactly what your asking here. From what I was told by visa, no store can 'tell you' that you have to make a minimum purchase amount there. If you go to buy a candy bar for 90 cents, and they say their sorry but you need to make a purchase of at least 5 dollars to use their equipment, that is illegal according to the people I spoke with at visa international.

To confirm this, all you need to do is call 1-800-visa-911 and ask them if its illegal for a store to require a minimum purchase amount on a debit or credit card. I dont know the law or specific legalities, Im just going by what I was told on the phone by the person taking my information.


I called the number and was very explicit with my questions.

They cannot charge you a minimum regardless of what you purchase. That is, they cannot charge your card $5 for a $0.90 candy bar. They can however require a minimum purchase. At least according to the person that I spoke with, there is nothing illegal nor against the merchant agreement about that practice. They even acknowledged it was a common practice when I asked if a lot places did it.

I would encourage you to call them back and be very clear about the distinction to see what answer you receive. You can also reference the Rules for Visa Merchants I linked above. Here's a HTML copy of the same rules from Google's cache:
http://216.239.51.104/search?q=cache:C7lqPYoXNI4J:merchants.visa.com/prevention/pdfs/Card_Acceptance_and_Chargeback_Guidelines.pdf

*meow*

(in reply to Saint)
Profile   Post #: 10
RE: Stores Violating their merchant agreement - 6/1/2006 2:53:09 PM   
ArtCatDom


Posts: 478
Joined: 1/20/2005
Status: offline
quote:

ORIGINAL: JohnWarren

quote:

ORIGINAL: pahunkboy

Oh wow. Well- from a former cashier stand...we could more less insist on method of payment of our choice- as a merchant. If such was illegal is isnt enforced. Or wasnt.


It may or not be illegal under your state law but it is a violation of the contract with the card processing company.  I recently bought a motorcycle with my Discover Card and the seller wanted to tack on a fee equivalent to what they would be charged by the processor.  I said "fine" but then insisted that the fee be recorded on the bill as a credit card fee.  They went white and told me they'd forgive the fee.  They knew damned well if I contacted Discover, there would be a good chance that I'd get a refund taken out of their virtual hide and might even lose their credit card priviledges.

I used to run an internet company that used credit cards and I made it my business to read the entire agreement.


Unless I misunderstanding completely, the OP isn't about charging more than for the merchandise. It's about requiring a minimum purchase.

*meow*

(in reply to JohnWarren)
Profile   Post #: 11
RE: Stores Violating their merchant agreement - 6/1/2006 3:06:41 PM   
ArtCatDom


Posts: 478
Joined: 1/20/2005
Status: offline 		I was wrong!

I missed it somehow reading through the pdf but found it again checking the HTML version.

"Always honor valid Visa cards, in your acceptance category, regardless of
the dollar amount of the purchase. Imposing minimum or maximum purchase
amounts is a violation." (Page 14 "Dollar Minimums and Maximums")

That also means I need to call back the 800 number and complain about an agent.

I apologize for the error. (I also double checked the appropriate federal law and there doesn't seem to be a problem legally though.)

*meow*

(in reply to Saint)
Profile   Post #: 12
RE: Stores Violating their merchant agreement - 6/1/2006 3:21:48 PM   
JohnWarren


Posts: 3807
Joined: 3/18/2005
From: Delray Beach, FL
Status: offline
quote:

ORIGINAL: ArtCatDom

I was wrong!

I missed it somehow reading through the pdf but found it again checking the HTML version.

"Always honor valid Visa cards, in your acceptance category, regardless of
the dollar amount of the purchase. Imposing minimum or maximum purchase
amounts is a violation." (Page 14 "Dollar Minimums and Maximums")

That also means I need to call back the 800 number and complain about an agent.

I apologize for the error. (I also double checked the appropriate federal law and there doesn't seem to be a problem legally though.)

*meow*


Well, you are forgiven.  It's a long long form.  Of course when I started it wasn't online and was printed in about six point type. 

One other thing, most merchants don't have agreement directly with the credit card companies but go through agencies (the one I had was CardService International)  They can't relieve you of any obligation the credit card company puts on you but they can add ones of their own.

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www.lovingdominant.org

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RE: Stores Violating their merchant agreement - 6/1/2006 3:28:38 PM   
ArtCatDom


Posts: 478
Joined: 1/20/2005
Status: offline
quote:

ORIGINAL: JohnWarren

quote:

ORIGINAL: ArtCatDom

I was wrong!

I missed it somehow reading through the pdf but found it again checking the HTML version.

"Always honor valid Visa cards, in your acceptance category, regardless of
the dollar amount of the purchase. Imposing minimum or maximum purchase
amounts is a violation." (Page 14 "Dollar Minimums and Maximums")

That also means I need to call back the 800 number and complain about an agent.

I apologize for the error. (I also double checked the appropriate federal law and there doesn't seem to be a problem legally though.)

*meow*


Well, you are forgiven.  It's a long long form.  Of course when I started it wasn't online and was printed in about six point type. 

One other thing, most merchants don't have agreement directly with the credit card companies but go through agencies (the one I had was CardService International)  They can't relieve you of any obligation the credit card company puts on you but they can add ones of their own.


Thanks for understading! I tend to find PDFs hard the eyes, for whatever reason, so they were likely somewhat glazed over by the time I got past that first dozen pages or so.

Gah! Minitype! I despise miniture print agreements!

What kinds of things do the agencies usually tack on to the merchat rules?

*meow*

(in reply to JohnWarren)
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RE: Stores Violating their merchant agreement - 6/1/2006 3:38:49 PM   
Saint


Posts: 279
Status: offline 		Wheeew! You had me worried there for a minute that I was mistakenly posting false information, ArtCatDom. Thank you though for going through and finding the exact information in the merchant agreement.

(in reply to ArtCatDom)
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RE: Stores Violating their merchant agreement - 6/1/2006 3:47:39 PM   
Alumbrado


Posts: 5560
Status: offline
quote:

... The bank in turn told me that no additional fees had ever come out of anyone using a debit or credit card during a swipe transaction with a store.


Maybe the bank didn't, but the merchants who sell credit card processing machines and card processing or check verification services to retailers, charge all sort of fees to the person you are calling 'the merchant'.

If that person wants to pass those costs on, they are free to do so...neither Visa nor the processing service can tell them how much to charge for their merchandise, or who to give a discount to.


< Message edited by Alumbrado -- 6/1/2006 3:51:52 PM >

(in reply to ArtCatDom)
Profile   Post #: 16
RE: Stores Violating their merchant agreement - 6/1/2006 3:54:52 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		The OP means on a DEBIT card -- I thought. Credit is not debit.

(in reply to Alumbrado)
Profile   Post #: 17
RE: Stores Violating their merchant agreement - 6/1/2006 4:06:19 PM   
JohnWarren


Posts: 3807
Joined: 3/18/2005
From: Delray Beach, FL
Status: offline
quote:

ORIGINAL: ArtCatDom
What kinds of things do the agencies usually tack on to the merchat rules?



It's been a long time so I don't recall precisely, but the boilerplate "the party of the first part reserves the right to place additional stricture on the actions, fees and behavior of the party of the second part over and above those placed by the party of the third part" or words to that effect.

Typeface reduction intentional to correspond with what I remembered.

_____________________________

www.lovingdominant.org

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Profile   Post #: 18
RE: Stores Violating their merchant agreement - 6/1/2006 4:09:15 PM   
JohnWarren


Posts: 3807
Joined: 3/18/2005
From: Delray Beach, FL
Status: offline
quote:

ORIGINAL: Saint

Wheeew! You had me worried there for a minute that I was mistakenly posting false information, ArtCatDom. Thank you though for going through and finding the exact information in the merchant agreement.


One of the things that makes me think well of people is when they try to correct if they gave misinformation.  Obviously, I have a high opinion of him.... [grimace] as opposed to my opinion of some others

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Profile   Post #: 19
RE: Stores Violating their merchant agreement - 6/1/2006 4:18:33 PM   
Alumbrado


Posts: 5560
Status: offline
quote:

ORIGINAL: pahunkboy

The OP means on a DEBIT card -- I thought. Credit is not debit.



Maybe they did mean that, but what they posted, and what I quoted and responded to, was 'debit or credit'.

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