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

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.


  • I really really wonder if the EFTPOS costs are truly more than cash-management, which has a significant labour cost attached.

    • That’s just it. There is a cost for cash which is fully absorbed by the business. From my own business, when customer offer to settle larger bills ($1000+) in cash, I will accept, but I will encourage them to pay by bank transfer with the statement “It’s going to cost you $2 to go to the ATM for car wear and tear, $2 to draw the cash, $2 to comeback. I will then spend $4 to put the money back in the same ATM.” By doing it electronically, you have a digital receipt that it has been done, and I don’t have to go either. Cash handling is expensive, and the time taken to get in and out of branch that may be only open 2 out of 5 days in a week between 10 and 2 can be problematic. I get upset with those that charge for EFTPOS. As a small business, the Merchant Service Fee can be up to 2% depending on the bank. On a laptop that I sell for $1000, that’s $20 fee for using a VISA/Mastercard. The laptop cost me $900 to buy, and I possibly would have had to pay a 1% surcharge depending on my cashflow. So in essence, the bank has made $29 off my transaction. I can also understand why some surcharge. What I can’t understand is why major companies like Telstra, Power Companies, etc Surcharge. If all transactions were done in cash for one day, it’d cost them way more. In some cases, I can see it as revenue raising, rather than a cost of business.

      • Same here, I run a panel shop and most transactions are over $1,000. We advise our customers just to EFT and email us a remittance advice. Never had a problem and customers don’t mind and in fact suggest it on some occasions.

        If done before 5:30pm it should arrive that night anyway 🙂

  • Not entirely true, some providers (e.g. Commonwealth) set out in their merchant agreements that minimum transaction amounts cannot be imposed.

    • Hi nickipea,

      Thanks for your comment! I actually did mention this in the article 🙂



  • IMO it is also used as a deterrent to use any type of card, which forces them to pay the GST on the transaction. More cashies means more opportunity to slip dockets through off the books and avoid paying that regressive tax.

  • @spandas the retailers (I’m looking at you snobby cafes) that really grind my gears on this issue are the ones that answer, “OK, I get it, can I just pay $1 extra to cover the card fee?” with “No, $15 minimum spend. No soup for you.” So sleazy.

  • I legit went to buy a coffee this morning on the way to work, went to pay with my pay pass and the girl at the counter said its a $10 minimum which yes I can understand, but for a coffee shop that only sells coffee between $3-$6 im not buying 3-4 coffees just to use my card

  • In 2013, the Reserve Bank of Australia (RBA) stepped in to crack down on credit card transaction fees that businesses were charging customers

    I just wanted to say they did a particularly piss-poor effort of bringing Jetstar into line.

  • Doesn’t this question get asked every month (it seems)?

    I think someone needs to make a name and shame database, with live maps of the business to avoid.

  • I occasionally go in and point out to businesses that their “no EFTPOS” sign is the only reason I’m not spending money with them right now. I think it’s important that they realise that they _are_ missing out on business, which they might otherwise be fooling themselves about.

  • My solution to this is simple: if it has a minimum transaction price and I am under that amount I leave the stuff on the counter and walk out.

    If you want take my card you don’t get my business. enough people do that and they change it.

Show more comments

Comments are closed.

Log in to comment on this story!