An amendment to the financial industry overhaul legislation currently under consideration by lawmakers would allow merchants to set minimum and maximum purchase limits. While many smaller retailers, restaurants, and convenience stores often post signs that state a minimum purchase of $5 or $10, those store policies violate merchant agreements that require vendors to accept credit cards regardless of the purchase amount.
Not all credit cards offer cash back rebates or other reward options, and many merchants mark up products and services to compensate for interchange fees. Smaller retailers rarely qualify for the deeply discounted processing fees enjoyed by big box stores. As a result, a customer who buys a candy bar with a credit card can cause a merchant to lose money on the transaction. Members of the bipartisan committee working out changes between the House and Senate versions of the bill expect some type of change to interchange rules later this year.
About the Author
Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.