Armed with your credit cards, you're frantically shopping for the perfect gift for that difficult-to-please person on your Christmas list. You finally find it and it costs less than $20. But when you go to the cash register, you find the merchant doesn't allow credit card purchases for under $20.
Most people either buy something else they don't need, or pay cash, which they may not be able to spare.
But, unknown to most consumers -- and many merchants -- such minimum-purchase requirements are strictly prohibited by VISA and MasterCard, the nation's two major charge cards. Enforcement is not an easy matter, however.
"It's definitely not something that is a sanctioned practice," says Jean Alford, a spokeswoman for VISA USA Inc. The prohibition, which is 10 years old, is contained in the regulations that govern how merchants are supposed to deal with credit card purchases, she says.
To make a complaint about a minimum-purchase requirement, a consumer should inform the bank that issues the credit card. Customer service policies vary among the thousands of issuers, but they may require a written complaint along with the merchant's transaction number that appears on a credit card receipt.
Once the complaint is made, it is passed on to the merchant's credit card bank, which tells the retailer that it is in violation, Alford says. If the merchant refuses to comply, the issuing bank has the ultimate recourse of rescinding the agreement, she says. She says she does not know how many merchants have lost their VISA credit card privileges over this issue.
Alford says the process does work, however. "Once we start the process, it is very effective," she says.
Steven M. Apeso, a spokesman for MasterCard International, says no MasterCard privileges have ever been withdrawn for requiring minimum-purchase limits. "There isn't a lot of enforcement capability on our part," he says.
Discover Card, which is issued by Sears Roebuck & Co., does not have any regulation concerning minimum purchase limits, according to Kathleen E. Murren, a spokeswoman for Discover Card.
Marcos E. Rada, a spokesman for American Express, says his company discourages merchants from setting purchase limits, but finds it acceptable if the limits also apply to other credit cards honored by the retailer.
Bankcard Holders of America, an advocacy group for credit card customers, learned of the regulations only six or eight months ago after following up on a consumer complaint, according to Gerri Detweiler, education coordinator for the group. This is because the operating regulations of the credit card association are shared only with the banks and they are considered proprietary information and are not released to the public.
Even as an organization that has accepted MasterCard and Visa cardsfor several years, Bankcard Holders was never informed of the regulation, Detweiler says.
After discovering this regulation, the group urged consumers to resist complying with minimum charges.
Ironically, to effectively challenge the minimum requirement, the customer may need to submit to the purchase limit at least once in order to obtain the merchant's transaction number from the credit card receipt.