Is it legal (in the U.S.) to charge a "convenience fee" to a customer using a credit card when the sales amount is under a certain amount (under the "minimum")?
by 
This Used To Be Me
ANSWERS: 9
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A merchant can do it legally. Credit card companies don't usually care how small a purchase is. But it IS a hassle for a merchant to have to deal with the bookkeeping when the amount or a charge (the sale, not the convenience fee) is so small that it doesn't even cover the cost of the bookkeeping.
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Some credit card companies do not allow fees for using their card, I think that Mastercard is one of them. Mastercard allows a convenience fee if the retailer charges a like fee on any transaction regardless of what type of payment is accepted.
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States that ban surcharging or "check out fees" for consumers who pay with plastic are: California, Colorado, Texas, Oklahoma, Connecticut, Florida, Kansas, Maine, and New York. http://www.todaysmoneymatters.org/pressroom/021406/
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I would decline to make the purchase if being charged a "convenience fee". If I was told of it before the transaction took place, I would say "no thanks" and get cash or shop elsewhere.
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Regardless of state laws on charging a fee for using a credit card, it is against the retailers contract with the parent card companies (visa, MC, etc.) to charge this fee. It is allowable to give a discount to your cash customers. So a store can mark up merchandise to the credit price, then offer a dicount to the person using cash. I just reread my contract to get this answer.
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My understanding is that it isn't illegal in the sense that there is a law against it, but it does violate the terms of the contract with the credit card company. So it is not legal in the sense that it is violating a contract. By discouraging credit card use, the merchant is taking money away from the credit card companies.
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Mastercard and/or Visa charges your retailer a extra fee for amounts that are smaller than I believe ten dollars, the retailer is just passing on the cost to you. The point is so people dont use their cards for purchases that are $ .98, the retailer is getting charged $3.00 per transaction.
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Yes.
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I had the same question because in our business we charge .25 for any credit card purchases under $5.00. What I found for our state was that we cannot charge a convenience fee for credit cards, HOWEVER, we can charge a fee of .25 for EVERY transaction under $5.00 and give a .25 discount to any customers using cash. It's a it redundant, and I believe the laws were created to keep businesses from charging outrageous fees for credit card usage, but I think that consumers need to be better informed about WHY small businesses charge these amounts. I don't think they truely realize the amount of money charged to a merchant for simply swiping the card, we don't want to punish cash paying customers by raising prices for everyone to cover credit card users. I hope this helps.
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