I also occasionally struggle with costs on smaller orders… it never fails that someone will buy the cheapest thing I sell, which used to be about $5, pay $7 in shipping (which I don’t generally profit on), cost me $.50-1.00 in packing materials and about 5-10 minutes time… the credit card fees are yet another added cost. Sometimes small transactions cost more money than they actually make me, especially if I consider how much I can make in my other profession. But I choose to swallow all of those costs, because another day the same person will come back and spend ten or fifty times as much.

For most restaurants, even coffee or sandwich shops, it’s really the same thing, whether they realize it or not. It’s not the $3 today, but the daily $3 latte or sandwich habit that makes them money, not to mention the fact that the same customer will bring their friends sometimes.

I’m pretty sure both cash discounts and minimum tabs are against the rules on most merchant agreements.

Starbucks manages to deal with the fees by charging substantially more than the artisanal coffee shops for not-so-special coffee and not-quite-fresh sandwiches. A 25-40 cent price difference on a $3 item will scarcely matter to people who like the product at a smaller shop, although I realize it’s a matter of scale.

As a customer, for the most part, I’d just rather pay the small premium that makes my life more convenient. If 25% of people spending $3 use a credit card, the cost to recover that is 1/4 of the transaction fees… roughly 15-29 cents divided by four. OK, so add 8 cents to the $2.90 sandwich, and you’re done. Or make up for it by offering high-margin add-ons.

The cost of food and transaction fees are usually only 18-33% of the menu prices anyway, unless you’re buying an expensive steak or high-end bottle of wine.

I sell on Ebay so I know full well about high fees and commissions. That’s the cost of doing business. If I feel I don’t make enough to be worth my time, I quit. Ebay can still make a profit if they cut their fees in half but should they? Much like Mastercard and Visa, they are the only game in town. If I were Ebay, I wouldn’t either.

I am a small business owner myself. Like every small business owner, I feel that I am unfairly penalized by the tax structure and other regulations, and I spend way too much of my time dealing with paperwork and bookkeeping—but that I can’t afford the expense of an accountant to do it for me.

But it’s not like this was a surprise. It was all right there for me to read on the IRS web site before I opened for business. I don’t accept credit cards, largely because my clients have almost never asked to pay by card. If they did, I would find myself in the same tough position as many small businesses: is it worth accepting cards and giving a big chunk of my income to the evil overlords at Visa and MC?

Breaking your contract with Visa by imposing minimums seems to me like cheating on your taxes. A lot of people do it and most of them don’t get caught. Surely most feel they’re justified, that the the federal government stinks and above all doesn’t understand the realities of running a small business. Business that cheat on their taxes are taking a calculated risk. The same is true of businesses that cheat on their Visa contract: you might save money, you might annoy so many customers that you don’t end up saving money, or you might get turned in by an asshole like me. As you say, within your walls, it’s your choice, but you can’t pretend not to understand the risks.

In the end, I’m with stacy. There is a class action suit against the credit card companies accusing them of collusion, price fixing, and charging exorbitant fees. (The specific issue in the current suit, I believe, is whether the card companies can charge merchants extra when a customer uses a premium card, which is complete bullshit.) I support this suit, and I would support more vigorous government regulation of the credit card industry. (And, for that matter, the payday loan industry, but don’t get me started.)

That’s not going to happen with the current administration. So I’m happy to support businesses in their attempt to stick it to the man, as long as they aren’t also sticking it to me. That’s why I’m fine with surcharges but not minimums. When I see the Mastercard decal in the window, I expect that to mean that I can use my Mastercard to pay. Is that really unreasonable?

Oh, by the way, click on haddock’s name, because he has some awesome pumpkin carvings on his blog. I’m taking a break from our pumpkins right now. Better get back on it, or I’m going to hear about it from Iris.

With that being said, I have no problems paying an extra fee on small transactions because they (the business) is providing me with an extra service. Actually, I have no problem paying a fee on larger transactions, providing it is the same fee you’d pay for a smaller transaction (this is usually less than fifty cents).

What I DO have a problem with is when I go somewhere (this happens most often at convenience stores) and they have a specific minimum with no budging on it - especially in instances where their sign about that is small and/or in an obscure place. I offer to pay the extra fee and only a couple of places have ever taken me up on that offer. I’ve even had a place refuse to let me buy things because they had a ten dollar minimum, I’d picked up something extra thinking it would go over ten and it worked out to $9.91. They offered to sell me a pack of gum that cost a quarter but by then I was too frustrated.

I myself, use a card for many transactions, but not for a banh mi. I also use my card as a de facto checkbook, never running a balance, but I know I’m in the minority there. Some of the problem would be solved if people lived within their means, rather than financing their groceries, restaurant meals and everything else.

As for Visa/MC they may state that their contract doesn’t allow for minimum charges but within my walls I have the right to conduct business any way I see fit. That’s why many signs have those signs reminding people of the right to refuse service. Granted, if I refuse service to a party I run the risk of being sued for discrimination, even if I refuse to serve a party for two at a table set for eight. That’s my risk. If it were me, the next time you came into my banh mi shop I’d ask you to leave.

I never thought much about the whole issue until I got to know someone who runs a small store and learned that point of view. Plus I am SO sick of chains taking over the planet. Anyhow, you had every right to feel annoyed b/c they didnt handle the situation well, and besides, you were hungry and wanted a juicy sandwich.

Being a huge frequent flyer mile hog myself, I use my card a lot. Pay it off every month too, so VISA doesn’t get much out of me, so HAH! Nowadays though, when I am not spending much, and I envision the biz as a struggling independent, my small good deed is to pay cash.

I’m also on a “I hate VISA” rag since I had to spend more than an hour trying to get a human to answer the customer service line and find out why all my charges from Oct 13-18 were being charged twice, and even three times (computer error-their fault). That’s annoying.

Getting lost in the shuffle, I think, is the fact that I said I didn’t have a problem with surcharges. It’s the minimums that gall me.

Tamara, they hadn’t made the sandwich yet, thankfully. I’m thinking about how I annoyed I would be if they had posted a sign in the window warning about the minimum. Probably still pretty annoyed. I wonder what they would have said if I’d offered $4 for the sandwich.

After watching them tell one of these kids recently where the nearest ATMs are (and most of them are sheepish about not seeing the sign, and willing to go to an ATM and come back, it seems like), we had a brief chat about profit margins on a cup of coffee or a small baked good, and how the credit card companies were really screwing them over on the small transactions that are 90% of their business, and they just couldn’t afford it any more. Well, it seemed more like a psychological cost: it was driving the guy nuts every time he did his books.

I don’t remember what the actual numbers involved were, unfortunately. But I do know that the shop managed to stay in business after dropping credit cards (and they never charged a minimum, I note), and is still healthy.

And for what it’s worth, I continued to pay cash for my coffee and baked good through the whole time when they accepted plastic.