Minimum Spend when using credit card

GingerRob

Techno_Mystic said:

I don't know about the law, but demanding a minimum spend can be a violation of the card issuer's Terms and Conditions.  This is certainly the case for Mastercard.  You can actually report demand for a minimum spend here:

https://www.mastercard.us/en-us/consumers/get-support/report-problem-shopping.html

The wording is interesting though.  It says "Debit Mastercard or Mastercard prepaid purchase".  It doesn't mention credit cards, so it seems they can demand a minimum spend for a credit card.

You've bumped a thread that is over 2 years old, and provided us with a US website.

Techno_Mystic

You've bumped a thread that is over 2 years old, and provided us with a US website.

I am aware of this. I am also aware that MSE closes old threads so if a thread is open then it is reasonable that I can post on it. I am also aware that the thread has over 11,000 views, and appears high up in Google searches, therefore people are clearly interested in the subject. I am also aware that the website is US, but it allows you to select the country in a drop down list, and doesn't warn you at any stage that it applies to the US only. I am also only raising the possibility that minimum spends are a matter of card issuer Terms and Conditions, but invite any reader to do their own research on the subject.

[Deleted User]

Sandwich van that comes to work have a min £3 spend. Nearly got caught out with a £2.80 sandwich so I just swapped it for a £3 sandwich.

Just to note I don't use the sandwich van every day, just the rare treat on the odd Friday.

jimbo26

It would appear that contactless payments attract a lower cost to the retailer, hence the no minimum spend for contactless payments. 

[Deleted User]

jimbo26 said:

It would appear that contactless payments attract a lower cost to the retailer, hence the no minimum spend for contactless payments. 

Well the sandwich van still charges for card transactions under £3 contactless or not.

AstonSmith

jimbo26 said:

It would appear that contactless payments attract a lower cost to the retailer, hence the no minimum spend for contactless payments. 

What makes you say that? I've seen the card merchant contract at my workplace and the rates are the same for contactless or chip and PIN. This makes sense because what would they charge the retailer if someone tried to use contactless but the card demanded a PIN check?

Gerry1

Deleted_User said:

jimbo26 said:

It would appear that contactless payments attract a lower cost to the retailer, hence the no minimum spend for contactless payments. 

Well the sandwich van still charges for card transactions under £3 contactless or not.

That's illegal.  They're allowed to have a minimum spend but not to charge more for a card payment.

[Deleted User]

Gerry1 said:

Deleted_User said:

jimbo26 said:

It would appear that contactless payments attract a lower cost to the retailer, hence the no minimum spend for contactless payments. 

Well the sandwich van still charges for card transactions under £3 contactless or not.

That's illegal.  They're allowed to have a minimum spend but not to charge more for a card payment.

Their minimum spend is £3. To buy the £2.80 sandwich they wanted me to pay an extra 20p to make it up to £3 so I chose a sandwich for £3 instead.

2e0arr

Poundland accepts for a £1

Speedbird676

Smaller retailers often have a minimum charge because as well as the % processing charge there is also a flat-fee authorisation charge, usually in the range 2-4p per transaction.

If we assume for a given merchant the authorisation fee is 2p and the processing charge is 1%...

For a £1 purchase, they would incur a total cost of 2p + 1p (1% of £1) = 3p (3% of the transaction)
For a £10 purchase, they would incur a total cost of 2p + 10p (1% of £10) = 12p (1.2% of the transaction)
For a £100 purchase, they would incur a total cost of 2p + £1 (1% of £100) = £1.02 (1.02% of the transaction)

Larger retailers typically absorb the cost for small transactions as they have more favourable merchant agreements due to the volume of transactions they process.