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Unread 09-15-2013, 05:15 PM   #1
Marconis
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Is a minimum credit limit legal in restaurants?

I just picked up food. I had cash on me, but wanted to use my rebate card from a new cellphone I got. My order total was $9.74. After handing her the card, she goes, "Oh, so sorry, $10 minimum for credit card". Instead of using my cash, I kindly asked if she could waive the "rule" for 26 cents. She said no, and made me buy a coke if I wanted to use it. I used cash at this point, but asked her if it was legal and she stuttered. I think it's absolutely absurd.

Well, is it legal?

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Unread 09-15-2013, 05:19 PM   #2
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I've been to quite a few places like that, they can do whatever they want. Same as places who say no bills over 20$ and such.

Now I have no clue why they do it, and what is wrong with charging under it, but there has to be something!
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Unread 09-15-2013, 05:22 PM   #3
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It has to do with the merchant fees that the CC company will charge the merchant for accepting that card. Basically, they will take a percentage of the sale in addition to terminal fees.

It is legal to set a minimum for CC purchases, but that charge can't exceed $10.

It is not legal to set a minimum for debit purchases.
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Unread 09-15-2013, 05:27 PM   #4
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I always knew why they did it, just always wondered if it was actually legal to do so.
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Unread 09-15-2013, 05:37 PM   #5
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It's their store and their rules, they could say no credit cards at all.

Yes it makes me mad, because I never have cash on me. I always have a card on me, buy hardly had cash.
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Unread 09-15-2013, 06:20 PM   #6
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I do believe that it is illegal to have a minimum, but I'm not positive.
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Unread 09-15-2013, 06:30 PM   #7
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I have no idea on legality as its really not a legal issue and more of a civil issue. However, most credit card processors forbid a minimum charge per their terms of use agreement. So it is possible that the business could be violating this agreement and possibly at risk of being fined or bared by the card processor.
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Unread 09-15-2013, 06:58 PM   #8
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Its completely legal, it's at their discretion how they are paid. They can't refuse cash, they can refuse credit/ debit cards. If they want to set a limit on credit cards to make it worth while to except them then that's fine.
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Unread 09-15-2013, 08:39 PM   #9
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Quote:
Originally Posted by ionakana View Post
Its completely legal, it's at their discretion how they are paid. They can't refuse cash, they can refuse credit/ debit cards. If they want to set a limit on credit cards to make it worth while to except them then that's fine.
They do have to follow their agreement with the credit card companies though.

A few years ago, a limit of $10 was made a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. So, it is legal now to have a $10 limit. Before then (2010?), it wasn't. The CC agreements had clauses that would forbid a minimum limit.

The law simply states that they CAN set a minimum limit up to $10, not that they HAVE to set the limit. Her refusal to deviate is likely just a mandate from her boss.
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Unread 09-16-2013, 12:22 AM   #10
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Quote:
Originally Posted by Marconis View Post
I just picked up food. I had cash on me, but wanted to use my rebate card from a new cellphone I got. My order total was $9.74. After handing her the card, she goes, "Oh, so sorry, $10 minimum for credit card". Instead of using my cash, I kindly asked if she could waive the "rule" for 26 cents. She said no, and made me buy a coke if I wanted to use it. I used cash at this point, but asked her if it was legal and she stuttered. I think it's absolutely absurd.

Well, is it legal?
"We reserve the right to refuse service to anyone."

It is permitted because it is not illegal to do so.

And, considering that merchants get socked with fees for anything to do with a credit/debit card (monthly fee to have the terminal, per-transaction fee, and the like,) I can understand why they'd want to make it worth the trouble - at least.

Is it legal? Yes.
Is it a good policy? Jury's still out.
What can you do about it? Talk to the card issuers - because THEY are the ones screwing us with fees!

(For instance, all of my debit/credit card transactions go through PayPal. Why? Because, overall, it's cheaper. While the hit I take per transaction is slightly higher, I'm not getting screwed with the monthly subscription fee - whether I take any credit cards that month or not.)

Is it fair? No. But, it's what we're stuck with (as merchants) - and will continue to be stuck with until consumers all get together and "vote with their feet" or "vote with their money."

As a merchant, I can understand the policy. As a merchant, I wish it weren't made necessary. As a consumer, I think the fees assessed are pointless and stupid...
- Overlimit fee (assessed even if the interest pushes you over!)
- Late Payment fee
- Interest rates bordering on usury
- Telephone payment fees
- Online payment fees
- Cash advance/withdrawal fees?
- Higher interest rates for cash advances
- Sharp increase in interest rates for "default" (late/skipped payment - even if it's just a day late, through no fault of your own.)
- Transaction acceptance fees
- Terminal subscription fees

And these pinheads have the raw temerity to keep complaining about being out of money? Or complaining that people default/file bankruptcy on them?

The first is a lie - if you're out of money, what did you waste it on?

The second is their own damned doing - they keep piling fees on you, you can't catch up, what else are you supposed to do? By the time you file bankruptcy, you've probably paid enough in interest alone to satisfy the principal on the balance...

And they'll keep doing it as long as you let them! Don't just go after your congresscritter to fix it - whenever a new law gets passed, new loopholes are found. Go after the card issuers - and convince them that it's a bad idea to keep doing this! If enough people stop using the cards, then they damned sure will "run out of money," and won't be having any more come in (or they'll raise their fees & rates, and screw themselves out of what customers they have left.)

It's not enough to just stop using the cards, tho - you've got to tell them why.
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Unread 09-16-2013, 01:01 AM   #11
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Fwiw $10 cash is $10 to the restaurant. $10 credit card is usually $9.70 to them. They eat the .30 as a courtesy.
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Unread 09-16-2013, 04:11 AM   #12
chowner
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Quote:
Originally Posted by ionakana View Post
Its completely legal, it's at their discretion how they are paid. They can't refuse cash, they can refuse credit/ debit cards. If they want to set a limit on credit cards to make it worth while to except them then that's fine.
They most certainly can refuse cash. Depending on the business and location this might be a violation of a local law, however certainly not the case everywhere.
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Unread 09-16-2013, 05:40 AM   #13
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Why don't places like this offer to charge the customer the penalty? I went to a bike store to get an inner tube and they had a minimum charge but gave me the option to pay $.50 extra. I opted to pay the $.50 rather than go find some cash.
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Unread 09-16-2013, 05:43 AM   #14
bobjp
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Quote:
Originally Posted by 5-90 View Post
"We reserve the right to refuse service to anyone."

It is permitted because it is not illegal to do so.

And, considering that merchants get socked with fees for anything to do with a credit/debit card (monthly fee to have the terminal, per-transaction fee, and the like,) I can understand why they'd want to make it worth the trouble - at least.

Is it legal? Yes.
Is it a good policy? Jury's still out.
What can you do about it? Talk to the card issuers - because THEY are the ones screwing us with fees!

(For instance, all of my debit/credit card transactions go through PayPal. Why? Because, overall, it's cheaper. While the hit I take per transaction is slightly higher, I'm not getting screwed with the monthly subscription fee - whether I take any credit cards that month or not.)

Is it fair? No. But, it's what we're stuck with (as merchants) - and will continue to be stuck with until consumers all get together and "vote with their feet" or "vote with their money."

As a merchant, I can understand the policy. As a merchant, I wish it weren't made necessary. As a consumer, I think the fees assessed are pointless and stupid...
- Overlimit fee (assessed even if the interest pushes you over!)
- Late Payment fee
- Interest rates bordering on usury
- Telephone payment fees
- Online payment fees
- Cash advance/withdrawal fees?
- Higher interest rates for cash advances
- Sharp increase in interest rates for "default" (late/skipped payment - even if it's just a day late, through no fault of your own.)
- Transaction acceptance fees
- Terminal subscription fees

And these pinheads have the raw temerity to keep complaining about being out of money? Or complaining that people default/file bankruptcy on them?

The first is a lie - if you're out of money, what did you waste it on?

The second is their own damned doing - they keep piling fees on you, you can't catch up, what else are you supposed to do? By the time you file bankruptcy, you've probably paid enough in interest alone to satisfy the principal on the balance...

And they'll keep doing it as long as you let them! Don't just go after your congresscritter to fix it - whenever a new law gets passed, new loopholes are found. Go after the card issuers - and convince them that it's a bad idea to keep doing this! If enough people stop using the cards, then they damned sure will "run out of money," and won't be having any more come in (or they'll raise their fees & rates, and screw themselves out of what customers they have left.)

It's not enough to just stop using the cards, tho - you've got to tell them why.
So as a merchant you always get charged a transaction fee, regardless of the amount?
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Unread 09-16-2013, 07:02 AM   #15
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Quote:
Originally Posted by bobjp View Post
So as a merchant you always get charged a transaction fee, regardless of the amount?
Yes, they would.

As it was stated above, it is legal to have the minimum charge but a violation their contract terms with the CC company. VISA and MasterCard like you to use that piece of plastic since they get a percentage of the transaction AND they will collect interest from you if you donít pay off the balance. For some of the reward cards, the transaction fees can be higher than a standard CC. The CC companies actually want you to report when this happens for these exact reasons.

Personally, I NEVER have cash in my wallet (except on Tuesdays when i play poker). I get too many rewards for using my credit card for it to be worth it. Iíll keep $40 in my truck for an emergency, but I havenít needed it. At larger stores Iíll use my card for any amount without a second thought, but the smaller places Iíll always try to hit the $10 mark.
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