Merchants can now decline credit cards or debit cards for purchases under $10, due to changes in the financial laws. They can also favor debit cards over credit cards for such purchases. The reason? Interchange fees are what Visa and MasterCard charges merchants for using their networks. For smaller purchases such as those under $10, the fees to merchants are even higher. This means that if you buy something for $10, the merchant might be charged 3% of that sale by Visa or MasterCard. Unless they pass on that cost in the form of higher prices, they simply earn 30 cents less revenue. If their total margin on the sale is only 10%, then they only make 7%, or 70 cents instead of a buck.
As yet, few stores are taking advantage of the new credit card rules. This is probably because they do not want to alienate buyers in a down economy. However, just as the above picture illustrates, some are beginning to make distinctions. Prior to the new financial regulations, merchants were actually prohibited from offering discounts for cash purchases under their agreements with Visa and MasterCard.
You may also discover merchants who will take a credit card if you are just buying a pack of gum, but tack on $5 as a surcharge. Now it's likely that no one would accept such a surcharge except for the occasional "gum emergency." Liquor stores and Discount Cigarette Stores in Houston, TX and surrounding areas, as an example, have in the past and continue to abuse their Merchant accounts and pad your bill with fees because you use your credit or debit card to make purchases with them. For a purchase of a carton of cigarettes, they have been known to add $1.00 or more as an added fee for using your credit or debit card and 50 cents for a single pack of cigarette purchase. When you ask why, they say it is the fee for them to accept your credit card or debit card. All of this was taking place long before the new financial rules were ever considered. It all makes me want to slap someone!
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