Credit card minimum transaction

msallen

Nifty_Purse said:

Retailers use "lost leaders" regularly and add the shortfall to other product prices.

Presumably they have to find them first then?

HillStreetBlues

born_again said:

Smallest I have ever seen is 1p. No idea what is was for though. 

Currently paying 5p a month for one of my mobile sim paid via my CC,  missed the 1p a month deal.

MrFrugalFever

I think in this day and age using a CC for any transaction amount should be acceptable. Businesses (however small) should factor that in to their pricing and costs.

Reading up about interchange rates and fees via Mastercard / Visa, it appears that it is largely %’s of the transaction amount as opposed to fixed fees, so in theory a £1.00 transaction is likely to cost the retailer a few pence.

Its all wooden dollars because ultimately the business needs business to survive, if they restrict sales to certain types of payment methods they could end up losing business! I.e if it was cash only, I would walk away….

born_again

Nifty_Purse said:

This was a simplified example. 
I work in retail. 
The cost price of the item is not what the post is about.
The retail price of an item does not directly reflect the cost price and sometimes not even the production cost of an item.
Retailers use "loss leaders" regularly and add the shortfall to other product prices.

Not forgetting that costs such as card fee's & cash are all factored into the price we pay. As they are part of the overheads.

Which is why some retailers will put a min limit of card transactions, otherwise it means increasing their costs.

AstonSmith

MrFrugalFever said:

Reading up about interchange rates and fees via Mastercard / Visa, it appears that it is largely %’s of the transaction amount as opposed to fixed fees, so in theory a £1.00 transaction is likely to cost the retailer a few pence.

Businesses don't deal directly with Mastercard/Visa etc though, they deal with a merchant services provider, and that's where the extra fees and fixed charges typically come from. A bit like forex rates.

Brie

molerat said:

400ixl said:

Cash is often worse for small businesses. 1) they have the cost of getting it to the bank and 2) they get charged a fee by the bank for depositing it.

Debit card is likely their preferred option.

Cash can be even worse for medium / large businesses.  The amount that has to be counted & bagged.  I used to work in retail and although the card take was higher the reconciliation took a couple of minutes but could spend a good couple of hours sorting the cash.  Then there is the cost of security taking the cash away and delivering change.

Long ago and far away I worked in a cash room from 11 pm to 7 am counting, sorting, rolling the coins (no bagging!) and logging the amounts for a very cash in hand entertainment complex.  Carnival rides, games, burger stalls, restaurants etc.  Because we were on the better side of the Canadian/US border it was very important to separate out the different currencies.  Most Americans didn't realise there was a difference between USD & CAD so would just hand over US bills and coins and the standard thing was to hand them back CAD change.  This was an instant boost of 20% to the business.  I expect this still happens wherever cash is used along that border and many others.  

eskbanker

blue.peter said:

Brie said:

They get charged a percentage of the total but I suspect there's a minimum charge as well.    So if they're being charged 2% or 10p minimum for each card use then every transaction under £5 would get a 10p charge.  So buy a pack of gum for 60p they lose 10p for the card.  That's a big loss on a small item. 

That's the sort of thing I was getting at. It might be helpful if anyone knows the actual numbers for certain. Though perhaps the actual numbers vary from one business to the next.

Yes, the numbers vary, so there isn't any meaningful rule of thumb, although my understanding is that it's pretty much all percentage based now rather than any fixed component per transaction.  I take the view that I'll pay by whatever payment method suits me, and if the retailer has any issue with that then they can let me know and I can choose whether to go along with their ideas or walk away....

MattMattMattUK

It really does depend and there are too many factors to deal with. My business is entirely B2B and 95% of invoices are settled by bank transfer of one kind or another, however some clients need to pay via card, procurement cards etc. That is all done online but we pay 20p per transaction and 1.2% on the transaction value (eg. the inc. VAT amount) which is reasonable although I would rather people pay via bank transfer it is part of the cost of doing business and factored into overall operating costs.