Minimums on credit not policy

For anyone who has ever been hard-pressed at a fruit stand, burger joint or bar to spend an arbitrary amount to use a credit card, remember this: The businesses that require a minimum are infringing upon your rights as a consumer.

That’s according to Barbara Coleman, spokeswoman for MasterCard, who said patrons who have signs bearing words such as “Minimum $10 on all credit cards,” aren’t in compliance with the agreement they have with credit card companies.

“The integrity of the system relies on making sure the interaction at the point of sale is a positive experience with the consumer,” Coleman said. “We want to make sure consumers have a choice on how they wish to pay for goods and services. You can’t disadvantage the payment of credit cards — that’s a violation of our rules. We don’t allow minimums or maximums.”

Contrary to popular belief, credit card companies don’t make money on each transaction — the middle man, or bank merchant, does.

“We actually don’t make revenue from interchange,” Coleman said.

But that doesn’t mean businesses aren’t strained — especially those that rely on small profit margins. Local mom and pop vendors, such as Vim & Vigor in Lihu‘e or Tradewinds bar in Kapa‘a, are known for asking patrons to spend a minimum of $10 and $20 to use a credit card, respectively.

But in his defense, said Gerry Maguire, Tradewinds’ owner, asking for a courtesy minimum isn’t the bar’s official policy. Actually, it’s done in an effort to keep prices down, he said.

“We have the signs up to encourage people to pay at the end of their visit because there are some people who run it for every transaction for every round,” Maguire said. “I like keeping our prices low. We’re a very friendly local bar. We’re all just trying to make a living.”

Killing the bottom line for small businesses isn’t the intent of credit card companies, but rather to provide a convenience, from which, Coleman said, everyone stands to benefit.

“Some people like the speed and ease of a credit card, some people like rewards, some don’t like to carry cash,” she said. “From a merchant’s perspective, it’s a guaranteed payment and they don’t have to have a lot of cash in their drawer.”

Amy Mendonca, owner of Tropical Burgers, who prides herself in not requiring minimums for credit card use, said convenience is synonymous with customer service. Even if it means allowing customers to do so buying a cup of coffee.

“As a consumer, I would feel insulted if I was told they didn’t take a credit card,” Mendonca said. “I know some vendors who ask for ‘cash only.’ If it works for them, that’s great. But I find you’re limiting the customer and in this day and age, you’re limiting your sales, because who always has cash on them?”

In the end, consumers will likely end up footing the bill for convenience one way or other, Maguire argued, as ATMs — a potential alternative route — also charge fees.

“I’ll probably look into getting an ATM,” he said. “The little guy compared to a big bank never wins.”

Patrons whose credit card is denied based on a minimum set by vendors can write a letter to the credit card company or visit its Web site to make a complaint, Coleman said.

• Amanda C. Gregg, staff writer, can be reached at 245-3681 (ext. 252) or


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