Credit Card minimum charges, surcharges, and PayPal surcharges.
Hey docryder,
Remember me saying that it was illegal for a store to require a minimum charge before a credit card can be used?
Well, I was incorrect. It is not illegal, it just violates their credit card REGULATIONS.
MINIMUM CHARGE REQUIREMENTS
Some stores require consumers to spend at least $20 (or some other minimum) to pay for purchases by credit card. They engage in this practice because they and their banks do not want the expense of processing a credit card transaction involving a small amount of money. This practice defeats one of the major purposes of credit cards-convenience-and may force credit card users to spend more than they want to. In addition, minimum charge requirements vary from merchant to merchant, and there are no regulations requiring disclosure of these minimum purchase levels. Visa's and MasterCard's regulations prohibit minimum charge amounts. American Express's regulations do not explicitly prohibit minimum charges, but its policy is to discourage any merchant practices that create a "barrier to acceptance." Amex does prohibit "discrimination" against the Amex card, however, so if a merchant has no minimum charge for Visa and MasterCard, the merchant may not discriminate against Amex by imposing a minimum charge.
TIP: If a store requires a minimum purchase for Visa or MasterCard, point out to the store manager that the practice is prohibited by the card companies.
This info and more on credit cards can be found here:
http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html
I had confused that with credit card surcharges, which is illegal in CA. I am not sure, and the article does not state, but it may also apply to merchants who charge a surcharge for their use of paypal, to cover the cost of paypal fees. I would have to find the CA law that states what is what. Ah, quick google search to the rescue.
Not really CA law, just PayPal's own agreement regulations.
Part of the PayPal agreement regulations:
"4.6 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions."
From paypal.
Well, that one is eye-opening, as I know a few people who have charged me extra fees just for using PayPal (to cover their charges).
Remember me saying that it was illegal for a store to require a minimum charge before a credit card can be used?
Well, I was incorrect. It is not illegal, it just violates their credit card REGULATIONS.
MINIMUM CHARGE REQUIREMENTS
Some stores require consumers to spend at least $20 (or some other minimum) to pay for purchases by credit card. They engage in this practice because they and their banks do not want the expense of processing a credit card transaction involving a small amount of money. This practice defeats one of the major purposes of credit cards-convenience-and may force credit card users to spend more than they want to. In addition, minimum charge requirements vary from merchant to merchant, and there are no regulations requiring disclosure of these minimum purchase levels. Visa's and MasterCard's regulations prohibit minimum charge amounts. American Express's regulations do not explicitly prohibit minimum charges, but its policy is to discourage any merchant practices that create a "barrier to acceptance." Amex does prohibit "discrimination" against the Amex card, however, so if a merchant has no minimum charge for Visa and MasterCard, the merchant may not discriminate against Amex by imposing a minimum charge.
TIP: If a store requires a minimum purchase for Visa or MasterCard, point out to the store manager that the practice is prohibited by the card companies.
This info and more on credit cards can be found here:
http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html
I had confused that with credit card surcharges, which is illegal in CA. I am not sure, and the article does not state, but it may also apply to merchants who charge a surcharge for their use of paypal, to cover the cost of paypal fees. I would have to find the CA law that states what is what. Ah, quick google search to the rescue.
Not really CA law, just PayPal's own agreement regulations.
Part of the PayPal agreement regulations:
"4.6 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions."
From paypal.
Well, that one is eye-opening, as I know a few people who have charged me extra fees just for using PayPal (to cover their charges).