Credit Card Minimum Purchase Requirements

To set or not to set credit card minimum purchase requirements — that is the choice facing small business owners. It’s a decision that many merchants make in the affirmative as a way to save on the credit card processing fees they’re charged every time they swipe a card, but it’s a move that shouldn’t be made without considering all the pros and cons.

There was a time, just a couple years ago, when setting a minimum purchase requirement was a violation of the rules of the credit card networks and merchant account providers that could lead to the revocation of a merchant’s credit card processing privileges. Recent credit card reform legislation changed all that.

Today Visa® and MasterCard® allow merchants to set a minimum purchase amount for their credit cards as long as it does not exceed $10. American Express® also permits the practice for its card as long as the same minimum requirement holds for all cards the merchant accepts; in other words, the merchant cannot discriminate between cards by setting a minimum purchase amount for one brand and not others.

So, why aren’t there more “$10 minimum purchase required when using credit card” signs at checkout counters? For starters, setting a minimum purchase requirement is left up to individual merchants. It is not a requirement handed down from the credit card networks, so each business owner is allowed to decide if such a move is in their best interests.

Many merchants are willing to pay the processing fees associated with each credit card transaction — even the smallest — because they don’t want to lose a customer who isn’t prepared to pay cash. An exception to this way of thinking is often gas stations and convenience stores that operate on razor-thin margins and can’t sustain the cost of processing fees on smaller transactions (micro payments) that chip away at their profits.

Merchants are also well aware that many of their customers strongly prefer to pay with plastic. Telling them that they must pay for a small purchase with cash is risking losing both the sale and the customer. These merchants have come to accept credit card processing fees as a cost of doing business and catering to shoppers’ expectations.

At Merchant Express®, we understand the dilemma that instituting a credit card minimum purchase requirement presents for merchants. That’s why we work closely with our clients to ensure that their merchant account delivers exactly the credit card processing services they need at a price they can afford. We customize each account to meet a business’s needs and budget because we want merchants to be satisfied that the services we provide are giving them the best return on their investment. We even offer a flat-rate credit card processing package called TransFreedom™ to help you save money and simplify your monthly statements.

If your current credit card processing fees have got you considering a minimum purchase requirement for your business, talk to a Merchant Express representative to see if we can give you a better deal.  It could turn out to be the most productive conversation you’ve had regarding your business in a long time!