Do you feel bad for charging less than a dollar on your credit card?

Visa and MasterCard have very clear rules with regard to requiring a certain minimum amount before accepting credit card as payment. They can’t. MasterCard will fine the merchant up to $20,000 for the first offense of this type. They take it seriously. (Side tip: If a merchant is obstinate about enforcing a minimum charge, the proper question to ask them is “Do you know you’re violating your merchant account agreement?” If they don’t care, then the number you need to call is right on the back of the card that was just refused. If you’re using a MasterCard, you already know the dollar amount of the fine, and can convey that to them.)

Update: The “no minimums allowed” rule is no longer legal in the US. Here’s what went down.

It’s clear that the TJ Maxx where J. Money charged $0.10 to his card understood this. They certainly lost money on that little transaction; the fixed fee per transaction is almost certainly double that. But setting aside the risk of huge fines for not accepting it, the store gains in the long run, as credit card purchases are typically 12% to 18% higher than cash purchases at a given merchant.

But what struck me more was seeing the kinder, more sensitive side of J. Money. He was “not proud” of doing that. He took it as a bit of unpreparedness that he didn’t have enough cash to cover the purchase. And that’s all well and good, because I’m not about to deny him his moment of self-loathing.

But seriously, though in my meaner years I would have enjoyed making a sport out of that. Now that I understand the costs of running a business, and in particular the cost of accepting credit cards, I try not to charge less than a dollar unless I absolutely have to, especially at places where I go often. It isn’t worth being put on an unofficial black-list of evil below-zeros (customers that cost the business rather than bring money into it).

So what do you think? Is charging a 50-cent candy bar good or bad cardsmanship?

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7 Responses to “Do you feel bad for charging less than a dollar on your credit card?”
By Paul on Aug 25, 2010 | Reply

Wasn’t a provision of the financial reform bill that passed this July that store owners are now legally allowed to not accept a credit card charge for less than $10? I’m almost sure it was.
By mbhunter on Aug 26, 2010 | Reply

Paul, thank you! Actually, the law imposes a limit on the minimum amount that card networks can demand their merchants pay, but in the long run this is the same thing as what you said.

The $10 figure is certainly correct.
By Marie on Aug 26, 2010 | Reply

Would I feel comfortable charging an item that costs less than a dollar? It depends. Do I *need* the item or do I *want* the item. Need is a whole different thing, even though I can’t think of anything I would need that costs less than a dollar.

I don’t have any problem charging small purchases at big box stores but will use cash or debit at the smaller ones. To me that’s common courtesy since the big box stores can better afford the fees than the smaller places.
By Anthony on Aug 26, 2010 | Reply

I would feel comfortable charging any amount, large or small. Since the stores now have the right to refuse small purchases, then it’s their choice to accept my small payment.
By J. Money on Aug 27, 2010 | Reply

I am getting more sensitive in my older years, aren’t I?
By Mike on Nov 20, 2010 | Reply

As a jewelry store owner who does a lot of repairs, it irks me to no end when i shorten a watch band for $3, only to have a customer whip out the plastic to receive miles or points on their card.People should learn to carry some “pocket cash” or stay home.
By Kevin on Jul 15, 2011 | Reply

I work at a print shop where sometimes people will make one print and then whip out their credit card to pay for their $.13. That annoys the living heck out of me, as I feel it is extremely irresponsible to leave home without any cash on you. People seem to forget that, although credit cards are convenient, if there is a natural disaster that causes a power outage they are pretty much useless. I am so happy that this minimum charge is now in place, because it was just ridiculous before.