Is It Legal For Stores To Set Minimum Spends For Credit And Debit Card Transactions?

I don’t know which is worse: a shop that doesn’t take card payments or a shop that has a minimum spend limit for card payments. All I know is, most people hate these two things. While we know stores aren’t obliged to support card payments, is it legal for them to enforce a minimum spend when you pay by debit or credit card?

Credit card payment image from Shutterstock

The minimum transaction rule seems to be prevalent in smaller retail shops and convenient stores. It’s usually around $10 to $15 but I’ve seen minimum spends as high as $30 (my local Chinese takeaway joint is an offender). There’s usually an option to pay a small fee if the total sum of what you are buying is under the minimum spend threshold, but paying $1 for a $8.50 lunchbox is a bit steep.

To clear up the legalities around this whole minimum spend when paying with card business, the short answer is yes, shop owners are within their rights to set one. They can set the minimum spend and surcharge to whatever they want but, of course, it’s within their best interest to make them palatable to customers. While most people don’t like being hit with a surcharge, a 50c fee to pay by card isn’t exactly breaking the bank. You might be unwilling to pay that amount but many other people would.

In 2013, the Reserve Bank of Australia (RBA) stepped in to crack down on credit card transaction fees that businesses were charging customers, but that’s specifically for credit card payments and not EFTPOS charges. Banks also have a say in the matter of minimum spend and surcharges when a merchant uses their card payment terminals. The Commonwealth Bank, for example, does not allow its merchants to put in a minimum spend. But this varies greatly between financial institutions and it’s hard for customers to keep up with the rules of every bank.

The general excuse for setting minimum transaction values and surcharges is that those businesses need to recoup the cost of installing debit and credit card payment terminals and processing the fees they incur. While supporting card payments does carry a financial burden, it usually equates to a few cents per transactions so a number of stores do overcharge when it comes to passing that fee on to their customers.

So at the end of the day, stores are within their legal rights to set minimum spends and surcharges for debit and credit card transactions, but you’re also within your rights to take your business elsewhere if they do so.

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