debit card fee?

yes, it is a big no no, not sure if it is actually illegal or if the credit card companies frown upon it. It is, however, very frustating when someone gets a small cone $1.66 including tax and then charges it. I have to pay a fee for each transaction as well as the fee from the credit card companies. Also, the money does not go straight into my account like cash does.

this is a big NO NO for the merchant to impose this on their customers.

Yes

the merchant will pay a percentage back to the bank.

Yes

when you use a debit card, doesn't the funds come directly out of your checking account?

Yes

why would a merchant impose a fee?

To recoup the percentage paid to the bank. I believe charging a fee is illegal, but having a "cash discount" seems to skirt the law.

OK, I harken back to the days when I worked for BofA in Nashville, and we were told most definatly that such fees were not "good practice" and that buisiness could not set a limit on the minimum amount charged. I see this plastered in several places I adore, and hope the plastic police don't come and yank their connections.

Now I do realize that the business pays a percentage, and they are trying to cover their "assets", so to speak, but we as consumers must also be aware that running a $1.16 ice cream sandwich with a card is a bit of a reach.

It is my impression that under the new finance laws, the retailer can set a credit card limit of ..oh say 10.00 for a transaction. Depending on the credit card and their are a multitude of different charges for different back cards, etc... the fees can range from 10 cents to 50 cents. On a 10 dollar or less item that really cuts into our profit margins. We do limit now, and if the customer insists on charging, we split the the fee .25 cents. When most restaurants run at a profit of 5% all the little things add up. Take the go containers for instance.. or the extra dressing, etc.. all things we happily give but lose out in the long run. Bill

I don't have any knowledge about if this is legal or not but I have been to a few local places that impose a small fee (usually $0.50) for transactions under a certain amount and it is a little annoying but honestly it's 50 cents so I don't think it really a big deal.

One thing that I do find interesting is Annemarie’s mention of not having a debit card and Bill's mention of "running a $1.16 ice cream sandwich with a card is a bit of a reach."

I know this is a food forum but I just thought that was interesting.

I NEVER have cash and would pay for a pack of gum on my debit card, and not feel bad about it BTW! I would venture a guess that 99% of my friends and acquaintances are the same way. I have discussions about this with my friends and acquaintances quite a bit and it seems like a generational thing as the people that are older than I am think this is crazy where as everyone around my age (33) or younger is of the same mind set as I am.

Sorry I know that is pretty far off the subject but I just found it interesting.

It is my impression that under the new finance laws, the retailer can set a credit card limit of ..oh say 10.00 for a transaction. Depending on the credit card and their are a multitude of different charges for different back cards, etc... the fees can range from 10 cents to 50 cents. On a 10 dollar or less item that really cuts into our profit margins. We do limit now, and if the customer insists on charging, we split the the fee .25 cents. When most restaurants run at a profit of 5% all the little things add up. Take the go containers for instance.. or the extra dressing, etc.. all things we happily give but lose out in the long run. Bill

Now, please keep in mind that this is based on things about 10 years ago when I was in the Ops Center. And as we all know, A LOT can change in 10 years.....thanks for the clarification, Bill.

I believe that it was just signed into law where a business can now set a minimum charge on a credit/debit card. There were several other items in the law change that was supposed to lower the higher rates banks were charging on debit transactions. This means they will probably just raise the rates on credit transactions to offset the difference.

There never has been a law that said you can't charge a fee, or have a minimum, but everyone that takes credit cards signs an agreement with their credit card processor that they would not have a fee and/or a minimum charge.

People seem to find it hard to believe, but those cards are not fee free to the merchant, and you can only absorb so many of charges before you lose money on lower priced items, hence the minimum charge. There is a percentage and a processing fee that gets taken out on every credit/debit transaction. The beauty of the situation for credit card companies is that they make money on both ends of the transaction. They charge the merchant fees to accept credit cards, and then drill the customer a percentage rate (assuming they don't pay their credit cards off each month). Its a win/win for them.

I have an intimate knowledge of merchant processing rules, and many of the things you are talking about depend on whether the transaction is pin-based debit or signature-based debit. The rules for signature based debit (Visa & MC) are that merchants cannot require a minimum transaction amount or apply a use-fee. The rules for pin-based debit vary depending on the sharing group (Cirrus, Jeanie, Plus etc).

As a merchant, your best bet is to read your merchant processing agreement. You can be fined by your processor for requiring a minimum purchase and/or use-fee or even have your ability to accept Visa and MC revoked.

As a consumer, you can report businesses that engage in these activities by contacting your card issuing bank for Visa or directly to MasterCard at: http://www.mastercard.com/us/personal/en/contactus/merchantviolations.html.

While it doesn't apply to debit cards, with so many ccs offering cash back or air miles or bonus points it seems EVERYTHING is going on cc these days.

And at the same time, CC companies are trying to get people to drop the particular card by raising APR's and skirting financing laws for their best intrest (pun intended).

[Robin Garr]

While it doesn't apply to debit cards, with so many ccs offering cash back or air miles or bonus points it seems EVERYTHING is going on cc these days.

Darn right! I've added enough miles to my frequent-flier bank with Delta Amex Platinum to buy us a pair of business-class round trips to Europe. I am not kidding about this.

I believe charging a fee is illegal, but having a "cash discount" seems to skirt the law.

Yes. I've noticed many (and with increasing frequency) gas stations, usually the on-the-highway places like Pilot, that list two per gallon gas prices - one price for card-using customers, and a lower, generally around .25/gallon, price for those paying cash.

If I'm not mistaken, did this bill not pass and was it not signed into law! And why would some one feel it is their duty to offer a web site that turns in small businesses that barely get for setting a small limit on credit transactions that cost us thousands of dollars a year and make the banks, credit card companies, and processors, billions? Get a grip or own a small business for a while before you feel the need to out what you perceive as some injustice. We are just trying to get by and be fair!!!
Bill and Susi Smith
Shady Lane Cafe


To Help Small Businesses by Ensuring that Debit Card Interchange Fees Are Reasonable

What Sen. Durbin's amendment does:

* Sen. Durbin's amendment would direct the Fed to issue rules to ensure that debit interchange fees are reasonable and proportional to the processing costs incurred. Visa and MasterCard currently charge debit interchange fees of around 1-2% of the transaction amount. These fees are far higher than the actual cost of processing debit transactions, and they mean that small businesses and merchants always get shortchanged when they accept a debit card for a sale.

* Sen. Durbin's amendment also prevents card networks like Visa and MasterCard from penalizing sellers for offering discounts to customers. The amendment would allow sellers to offer discounts for customers to use competing card networks and for customers to pay by cash, check or debit card. [b]The amendment would also allow sellers to choose to decline credit cards for small dollar purchases (because interchange fees often exceed profits on such sales).

This is great. Even those of us who despise the plastic have to pay premiums built in to our prices to subsidize their use. Even worse, I recently read the average well to do credit card user receives around 750 dollars per year in "rewards" and other subsidies for using the cards. The average low income consumer actually pays an extra 23 dollars per year to subsidize the card users. I would love to see more of this, though I do believe it is against the TOS for the processors.