Shops routinely ignore card firms' rules against minimum purchases
8/5/2008PITTSBURGH - A small, handwritten sign is taped to the counter at Gus Miller's newsstand in Pittsburgh. It reads: "$15 minimum for credit card, 50-cent fee for debit."
Kim Gresco barely acknowledged the sign as she reached for her wallet. The cashier rang up her soft drink and pack of cigarettes, little more than $5 total. She handed him her debit card.
"You know about the fee, right?" he asked.
"Yeah, it's fine."
The transaction cost Ms. Gresco an extra 50 cents, but it could have cost store owner Brian Weiss $50,000.
Most credit card companies don't allow stores to set policies like the one in Mr. Weiss' and scores of others across the country.
Several months ago, after one customer complained to MasterCard Worldwide, the company through which Mr. Weiss received service turned off his card machine and threatened him with fines and a lawsuit.
MasterCard, Visa Inc., and Discover prohibit merchants from charging additional fees for use of the cards or refusing to accept cards for purchases below a set amount. For Discover and MasterCard, this also applies to debit cards.
Mr. Weiss continues to accept MasterCard, but through a different provider. He also continues to require a $15 minimum and a 50-cent fee at the four stores he owns in Pittsburgh.
But he knows that he's breaking the rules and that more threats of legal action and service termination are possible.
Why does he refuse to change his store policy?
His father, Eddie, who ran the chain of stores for 30 years until his son bought the company, said it's simple: If they don't charge a fee and have a minimum, they don't make money because of the fees they must pay to the card companies.
The credit card companies say policies like Brian Weiss' aren't fair to consumers.
The Block New Alliance consists of The Blade and the Pittsburgh Post-Gazette. D. Clark Denison is a reporter for the Post-Gazette.