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Con: Requiring minimum purchases could alienate customers

By ALLISON MILES
Oct. 14, 2012 at 5:14 a.m.

Pro con card swipe

Did you know ... ?

• Swipe fees, or "interchange fees," are a percentage of the transaction banks collect each time a consumer makes a credit or debit card purchase.

• Fees average 1 percent to 2 percent for debit cards and 2 percent to 3 percent for credit cards.

• Stores can legally require up to a $10 minimum purchase for credit and debit card transactions.

Source: National Retail Federation website

Olivia's Closet, a Victoria boutique that specializes in clothing and accessories for women and children, recently relocated to 3602 N. Laurent St.

While the location might be larger, the store's practices remain untouched. Owner Kimberly Lawrence accepts both credit cards and debit cards but requires no minimum purchase.

Lawrence said she understands why other stores impose limits and sees nothing wrong with it but said it didn't seem right for her business.

"I feel like it might turn some people away," she explained. "I kind of look at it like, if I eat that 30 cents, maybe that customer will come back and shop with us again."

The issue is one that small-business owners must carefully consider when developing store policies, said Scott Strumello, a consultant with Auriemma Consulting Group in New York.

Although companies do face swipe fees, consumers prefer being able to use cards freely, and minimum purchases may not help build consumer loyalty.

"It's not necessarily as clear cut as we think," Strumello said. "It might be a matter of 'If I do this, I might lose customers who might come back and spend more money the next time.'"

Victoria resident Deborah Bluhm said she felt businesses should not impose limits, but said credit card companies should consider changing their practices. The industry should not require small businesses to pay swipe fees on miniscule purchases, she said, noting she uses her debit card more often than not.

"I hardly ever carry cash," said Bluhm, who works with a Victoria furniture store. "I'm used to the swipe."

Michelle Merrick, a full-time mother of two in Victoria, agreed that stores should shy away from requiring minimums.

Stores don't apply limits to those paying with cash, she said. And, since debit works much the same as cash, the same should apply for card purchases.

Merrick said she's found herself from time to time buying things she didn't need or want, simply so she could use her card.

"I don't agree with that," she said. "I really do think you should be able to buy whatever you want."

Related stories:

Pro: Minimum card purchases help cover swipe fees stores owe, click HERE

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