Minimum Transaction Amount to use Cards - A thing of the Past?

bert&ernie

cos wrote: »

You're right - I got caught up on retailers charging extra as opposed to refusing to accept, only because I'd never personally seen a refusal, just a charge warning. When I researched this I'd hoped to find it was illegal to add a charge, but apparently it's ok in the UK. Depressing

UK law explicitly protects a merchant's right to levy card surcharges. Its the scheme rules that are effectively illegal in the UK!

Remember John Redwood? You can thank him for that.

cardinalbiggles

I believe that legally a shop has to display such restrictions on the use of cards at the point of sale.

bluebell_lily

MicroDirect charges on top of the card payment. This is the same with some shops selling cars, holidays and the like.

Yo Sushi can't remember exact amount, refuses under £10.

Some shops accept card payments if over £5.

Karl.H_2

I noticed smaller companies (such as takeways, cheap supermarkets, etc.) asking for a minimum of £5, but I often go to Tesco and buy items for a couple of £s and use my card - which happens to be Tesco's own.

chattychappy

bert&ernie wrote: »

UK law explicitly protects a merchant's right to levy card surcharges. Its the scheme rules that are effectively illegal in the UK!

Remember John Redwood? You can thank him for that.

Actually I do "thank him" (or whoever it was) for that. With merchants able to discount for cash, or surcharge for credit cards, it's an incentive to banks to keep their charge competitive with the cost of handling the cash alternative.

In those days I had a B2B which didn't accept credit cards at all - we couldn't take the hit of the charge on the margin (less than 10% in most cases), and didn't want to put the price up for our many customers who didn't pay by card.

Later we went for it anyway - I was quoted 4% by Barclays Merchant Services. No negotiation, take it or leave it. This was for cardholder present or mail order. When I phoned Natwest, they asked "who was my branch manager". When I said we banked with Barclays, his comment was "we don't really want to compete, you should deal with Barclays. He even offered me the phone number of the Barclays rep!". That's the way it was then, at least for us. I rang a couple of others too (RBS, Lloyds I think) - with similar responses.

So we used differential pricing - each item had two prices, the difference being roughly 4%.

After a customer demanded "the right" to get the better price on a credit credit and we refused, he reported us to Barclays who threatened to take our facility away unless we removed the differential and refunded back all the customers we had "overcharged". Well the rep was out of date - the law had moved on. A few weeks later they reduced our fee to 1.8%, and we then made the commercial decision to drop the differential.

I think it's much better this way, provided it's clear to the consumer. The only problem I have is if minimum sale values, or surcharges are not displayed at the point of sale. If the availability of credit card acceptance is displayed earlier in the process, and so are prices (eg in a shop window - you see the price labels, and the credit card stickers) then so should any special conditions.

bert&ernie

Large merchants like supermarkets are able to get good terms with their acquiring banks. The cost to them for accepting card payments is likely to be much lower than that of a small independent retailer such as a convenience store.

Its also worth mentioning that some small retailers actually quite like cash - they may pay their suppliers and staff in cash and of course its much more "flexible" to account for. As such, these types of business have much less incentive to take cards, especially for low value payments.