Pro: Minimum card purchases help cover swipe fees stores owe
Oct. 14, 2012 at 5:14 a.m.
In today's high-tech, fast-paced world, where convenience oftentimes outweighs all else, it's no wonder more and more people find themselves paying with plastic.
Nothing comes free, however, and that includes card transactions.
Retailers pay swipe fees each time a customer pays with a debit or credit card. And, if those purchases are too small, fees can eat into profits.
While some retailers require minimum card purchases to avoid losses, others worry customers might not react well to limits.
Here, Crossroads residents weigh in on the issue.
A step inside Friday's Fried Chicken in Shiner affords the visitor a chance at a steaming cup of coffee and breakfast pastry, a plate of chicken and mashed potatoes and so on.
While the business gladly accepts credit and debit cards, owner Victor Patek said there is a catch. The purchase must be at least $5.
That minimum requirement ensures the swipe fees the business pays don't cancel out the purchase itself, he explained, noting that some customers want to charge their 97-cent cup of coffee.
"At a big box store or a gas station, people probably aren't going to spend less than $5 or $10," he said. "But it's different for businesses like mine. If you're buying coffee and a donut for $1.59, it doesn't pay off for us."
Scott Strumello, a consultant with Auriemma Consulting Group in New York, said different companies benefit from different minimum-purchase policies.
For businesses like supermarkets or dry cleaners, where customers return regularly, setting such limits might not be the best option. For others, however, those limits could really help.
He suggested those companies that are unsure about what they should do to simply try it out. Set a minimum, see the results and then decide where to go.
Brandie Hussion, a Victoria attorney, avoids minimum payment issues altogether by paying with cash. It's quicker, she said, and allows her to keep a closer eye on her spending habits.
Still, she said she saw nothing wrong with enforcing such a policy for cards.
"From what I understand, the reason they do it is they're being charged," she said. "I think it's fine."
More people might be OK with meeting minimum purchases if they realized why some small businesses require them, said Alfred Mata, who works in Victoria's hotel industry.
Mata's previous employment with a Chicago comedy club that put such limits on card transactions offered him a look at that side of the business.
"Any time they swipe a card, they have to pay an amount," he said. "They're just trying to cover those payments. I really don't think people understand that."
Con: Requiring minimum purchases could alienate customers, click HERE