Retailer refused to accept my contactless card

Hominu

I noticed a branch of Poundland today had some contactless terminals at last. Perfect shop I thought as I don't have any change.

So I spent £3 on a bunch of items and went to the cashier to pay. After placing them in a bag for me I showed her my contactless debit card; "We only accept cards for purchases of £5 or more" was the reply. "I'll leave it then, I don't have the change." I said, and I left the store empty handed.

Now, correct me if I'm wrong, but I thought contactless was meant for 'micro-payments', as explained by the maximum transaction value being £10 ? What is the point in a contactless terminal where you only allow transactions costing between £5 and £10 ? Surely thats like 1% of most of the business for a store like poundland, where most people are going into the store for a few items?

CrazyRed

Contactless technology is for payments of up to £15. However, an individual retailer may have a minimum spend policy, especially on a credit card, because of processing charges with the card acquirer they're with. Any lesser amount than the minimum transaction normally means that their profit is eaten up with card processing fees.

Hope this helps.

Fiddlestick

Hominu wrote: »

Now, correct me if I'm wrong, but I thought contactless was meant for 'micro-payments', as explained by the maximum transaction value being £10 ?

Yes, buuuut...

What is the point in a contactless terminal where you only allow transactions costing between £5 and £10 ? Surely thats like 1% of most of the business for a store like poundland, where most people are going into the store for a few items?

They probably have razorthin margins on most of their products.

On top of that, acquiring banks take a cut of all card transactions as their fee for doing the processing.

It's probably not economical for poundland to accept cards under a certain amount as they would lost money overall.

Compare that with someone like Tesco that can afford to set up their own processing infrastructure and hammer out a sweet deal with the banks on fees.

Helix

The merchant that Poundland use might only be supplying contactless terminals now so maybe they didn't have a choice.

Hominu

I can understand them refusing a credit card, but they have installed contactless terminals and yet refuse transactions under £5 on a debit card. Why not just use standard, non-contactless terminals and confuse the customer less? We've had the advertisements from barclays rammed down our throats and when we try and use it as per advertised we get rejected!

The other thing that annoyed me was that I couldn't see any sign that said a minimum payment amount, if there was, I wouldn't have attempted it.

I hate loose cash and I hate banknotes (specially when a cashier gives me several notes, a handful of change and then shouts NEXT! before I've had chance to even put them somewhere), but it seems like I'm going to have to keep both of them and put up with this hassle

scragend

Hominu wrote: »

The other thing that annoyed me was that I couldn't see any sign that said a minimum payment amount, if there was, I wouldn't have attempted it.

The Poundland branches I have been in have a clear notice at the checkout and at the entrance saying "we accept cards - minimum purchase £5" or words to that effect.

pmduk

scragend wrote: »

The Poundland branches I have been in have a clear notice at the checkout and at the entrance saying "we accept cards - minimum purchase £5" or words to that effect.

Those signs are also prominent in the branches I use.

casper_g

Hominu wrote: »

I can understand them refusing a credit card...

On the contrary, if what I heard on the news this morning is right (on the government plans to control card surcharges to consumers) merchants typically pay a flat fee of about 20p for processing on a debit card transaction, but a variable fee of about 2% for a credit card transaction. On a small transaction, say £5.00, that makes the credit card transaction fee about 10p, i.e. it costs them more to accept a debit card than a credit card.

pqrdef

Cash handling also has costs.

And the calculation of "margins" is a very arbitrary business. I doubt if Poundland pay more than 30p for anything they sell at £1. The rest is overheads, and nothing says they have to be shared out evenly per item. Often it pays to shift the maximum volume, because any contribution to overheads is better than none.

The prejudice against small card payments goes back to the days of mechanical swipers and signatures, when card-payers held up the queue.

Maybe Poundland will change their policy. Until then, there's always the option of spending £5.