Hacker News Reader

Comment by dhosek | Hacker News Reader

> Every once in a while, I'll run into places that do a cash discount, usually smaller businesses. It's super common at gas stations - even big chains.

That's generally prohibited by the credit card merchant agreement. Gas stations are one of the rare exceptions.

View on HN

> That's generally prohibited by the credit card merchant agreement.

That is not true.

> Cash Discount programs are legal in all 50 states per the Durbin Amendment (part of the 2010 Dodd-Frank Law), which states that businesses are permitted to offer a discount to customers as an incentive for paying with cash.

https://www.quantumelectronicpayments.com/implement-legal-an...

You are missing the point. The credit cards companies have mandated that the "regular" (that is the main advertised) price is the one you pay by credit card. They don't object to having cash-discount prices, but they want to make sure that people do not perceive that credit card purchases are more expensive. It is all about perception.

Cash discounting is fine in all states. Surcharges are typically prohibited. Gas stations may be exceptional in that some will publicly advertise the dual pricing where allowable.

Surcharges were prohibited by merchant agreements until the big card networks settled a class action lawsuit. As of 2013 anybody can add a surcharge, provided they follow the card network rules. State laws prohibiting surcharges were struck down by the US Supreme Court in 2017.

https://usa.visa.com/dam/VCOM/download/merchants/surcharging...

https://www.mastercard.us/en-us/merchants/get-support/mercha...

https://www.clearent.com/insight/surcharging/

They aren't allowed to charge minimum checkout amounts for cards either. I reported a few businesses before when it was more widespread. Some of them (usually gas stations) put up $10 minimum credit card purchases. If they try to pull that on me I usually just say "you know that's against the terms of your merchant agreement" and they'll sometimes run it.

If you had to carry cash for small purchases that would remove the convenience of cards.

The minimums are annoying but understandable. You pay a flat transaction fee (15-30 cents) plus a percentage of the sale (roughly 1-4% depending on the card type). If you’re doing a lot of small transactions, that 15-30 cents is a huge hit to your margins.

Buying a single pack of gum on a rewards credit card might lose the merchant money. They’ll make up for it in aggregate, but that transaction has a negative return. I understand the desire to limit how frequently they sell at a loss.

Credit card agreements used to require parity with cash and no minimums (as Visa and MasterCard had to create new buying habits). But recent laws have placed restrictions on those restrictions.

I get that but sometimes u transact outside and then you decide to go inside and spend a few bucks but then they hit you with a minimum. It's annoying. That 30 cents isn't going to lose money unless you bought something for like 60 cents. Margins are big inside, even if you only spend a few bucks it covers the fee versus no sale. They're just trying to boost basket sizes for more profit.

Minimums are legal.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 permits businesses to impose a minimum purchase amount of up to $10 for credit card use, but the minimum must be the same for all credit card issuers and payment card networks.

Reply on news.ycombinator.com