3 Facts Retailers Don't Want Credit Card Customers to Know
Written by Joe Taylor Jr.
Posted On: February 3, 2010
American Express is a CardRatings.com advertiser.
To accept credit cards at your place of business, you must agree not just to pay standard transaction fees, but to also maintain standards consistent with all other merchants in your processing network. That means covering some of the risk against fraudulent transactions, plus paying interchange fees as high as 4%. As a result, some merchants have introduced policies designed to push some transactions away from credit, or to force credit card users to cover higher overhead costs. All three of these prohibited "checkout rules" pop up from time to time:
Minimum/Maximum Credit Card Charge Amounts
It's not uncommon to see signs at small stores and cafes proclaiming a "minimum charge card purchase" of $5, $10, or even $20. Likewise, car dealers and commercial vendors sometimes cap credit card acceptance at a few thousand dollars. Consumers rarely realize that merchant agreements require retailers to accept credit cards for purchases of any size.
Credit Card Surcharges
Under credit card acceptance agreements, merchants can charge a "convenience fee" when customers pay with plastic to bypass a laborious, customary way of making a purchase. For instance, theatre box offices and county utility boards can ask for a few dollars extra in exchange for keeping you from driving downtown and standing in line for an hour. Otherwise, there's no permitted surcharge that retailers can add to your bill for paying with credit. (Some states also have no surcharge laws.)
Credit Card Identity Verification
Some retailers now request to see a driver's license or other government-issued identification when accepting credit cards. While this practice seems like a reasonable way to deter fraud, recent identity theft cases and thrown these activities into question. "Skimming crews" that gain access to a credit card's magnetic stripe data can also capture a customer's date of birth, home address, and driver's license number from a quick snap of a pinhole camera. Therefore, credit card merchant agreements prohibit retailers from requesting photo identification unless a customer has forgotten to sign the signature strip on the back of a card.
Visa, MasterCard, American Express, and Discover all handle complaints about merchants directly from their websites or via special customer service numbers. In practice, however, the best way to voice your displeasure with a retailer's payment practice is to vote with your wallet: find a vendor that's happy to accept your credit card.
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.