50p charge if you spend less than £10 on a card?

[JoySzasz]

Our local village petrol station/shop does this. Not always, but always when the miserable boss is around.
I spend a fair bit in there, as l imagine most of us locals do.
I might have imagined it, but l thought l heard retailers were not supposed to do it?
They are still claiming (according to my brother) that the bank charges them.
Are they being unreasonable?

Yes there's a charge for the chip and pin payment, fair enough to pass it onto the customer when its a small purchase lots of small businesses do it.

Sounds about right to me. Our merchant bank gives us decent rates (on the back of our parent company's deal) and our customers see savings of about 50% (I set up a tool to compare card charges). On a transaction amount of £9, the credit card charge is just over 25p, so a small store may not even be breaking even by charging 50p.

We charge 50p for every transaction which covers the cost of having the machine, it is a convenience for our customers but we would rather deal in cash.

I don't see how anyone could stop retailers charging when it costs a retailer to have the facility. Some months it covers costs, some months not. Use cash if you don't like the charge....

Plus there will be some small charges when the credit card payment hits the shop's bank account from the merchant bank.

Okay then. I will try to complete my future transactions with a smile on my face!

The bank does charge them! We get free banking in the UK as private customers, but businesses don't. They have to pay per transaction - or buy bundles of transactions - so sometimes low value card transactions would lose them money.

I'm pretty sure the card machine contract my DP has says he is not allowed to do that...

I can see why small businesses do it though - card processing charges are pretty steep.

It's been a while since I looked into this but in general debit card charges have a set processing fee and credit cards have a percentage based fee, both charged by the card machine company. The retailer can choose to pass these onto the customer but they shouldn't make a profit out of these charges. How this applies to allow cost airlines, I'm not sure

Low cost, not allow cost. DYAC!

Lots of merchant terminals are horrifically expensive - it's not a free facility and yes, the bank will be charging them, through the nose.

For lots of small retailers, charging an additional fee is the difference between being able to afford to have a terminal or not. So they are not bu IMO.

To clarify, l never spend less than say 6-8 pounds anyway. I wouldn't use my card for a smaller amount. I know the staff are embarrassed to ask, they all know we keep the shop going with our very regular purchases. We are a tiny village, most of us on first name terms.
Thank you for your responses.

Sorry, that looked a bit sour and robotic!

Credit card companies charge 3-5% of all transaction values
with a minimum of around 20p
PLUS a monthly flat fee of around £30

credit cards are NOT free
retailers are ENTIRELY entitled to charge

the big hoo hah used to be SAinsburys pretending that 2% of the shopping was "card fees" and thus not VAT rated - HMRC stamped on that about 10 years ago

Oh, and l never use a credit card. Just a regular bank one. My feeling was that it was better for them for the locals to get our shopping there plus a card transaction - than not at all.

If l use a smaller independent Annie it would normally be for more.
But to be honest, l haven't seen or been stung by a charge for years
I'm glad l asked. I like to know the facts.

Do the big shops not get charged then? Regularly spend way less than £5 on my card in Pets@Home.

I pay for pretty much all small transactions with contactless now and rarely encounter anywhere without one... I've never been charged for it either. Surely that was the whole point of contactless? To get us using cards for small transactions? I live in London so don't know if those machines are less common elsewhere.

Some will absorb the charge for debit cards but charge for credit cards.

Terminal rental can be rather costly.

You could argue that cash also costs money as it is a theft risk and needs to be kept in a safe and taken to the bank.
They pass on the charge from the card services company, so maybe they should be stopped from charging and instead the cost is paid another way but how? Would you want higher APR, per transaction cost on your statement, monthly fixed charge?

Yanbu.

Cash also has fees for the retailer and is a Hasel to hold and transport, as my friend with a pub knows and has to pay a fortune for it to be taken securely off site to be banked.

For medium sized businesses cash or cards costs about the same, apart from amex who I charge a fortune

Big chains will have negotiated corporate banking tariffs for a start. The banks clamour for the really huge businesses to join them and everything is open to negotiation. Often they're paying much lower rates than small retailers.

Some small shops round here won't let you use a card for less than £5. I avoid them as I never have any cash on me.

The chip shop charges 20p per transaction by card.

Ah I see, that's okay then. I often only pay around £2 in P@H

I find hardly anywhere that takes contactless other than the CoOp.

I wonder if contact less transactions cost more/less/same as debit card. Terminal rental may be more.

Big shops get charged fees but I do wonder if they get a bit of discount if they put through a certain number of transactions a day. Anyone work for Merchant Services providing services to large retailers? Are you able to disclose how high quantity of transactions affects retailers fees. Also is there a fee based on the risk involved, so large value transactions vs small, card present vs cnp vs online.