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When a merchant signs up to take Mastercard, Visa, American Express or other credit cards, they generally are required to sign what’s called a “Merchant Agreement”.  This agreement covers the rules and regulations that the merchant is required to abide by.  Here is the Mastercard Merchant Agreement that I found on Mastercard’s website; I’d imagine that the other card issuer merchant agreements are similar.

It’s hundreds of pages long, but from my understanding (I’m not a lawyer, nor do I work in a bank), some of the salient points are:

  • Merchants have to take all relevant credit cards
  • Merchants are not allowed to charge a fee to take credit cards (though this seems to be different by state as I know some places (gas stations?) advertise a lower price for cash
  • Merchants are not allowed to have a minimum amount that you have to spend to pay by credit card

Here are 3 stories I’ve run into from my own experience – if you’ve got a similar story I’d love to hear it.

I’m not “allowed” to take American Express

While on my recent trip through Arizona on my way to the Anthem Veterans Memorial near Phoenix (taking advantage of the cheap one way car rentals into Arizona), we stopped at the Little Caesars in Chino Valley, Arizona (north of Prescott).  When I attempted to pay with an American Express card, the employee said “I’m not allowed to take American Express“.  His phrasing was strange, so I asked a followup question.  He said that his manager has instructed him not to take American Express.  Something about the “fees being higher” :-).  And while I can totally commiserate with the feeling, I am also quite sure that is against either his franchise agreement with Little Caesars or their agreement with American Express.

Asking for additional ID verification

When I buy variable load Visa or Mastercard gift cards at my friendly local grocery store, I am frequently asked for additional ID.  I believe the threshhold is $1000 where they take my driver’s license, swipe it, and compare with the name on the card.

Here is what I believe is the relevant section of the Mastercard merchant agreement

A Merchant may request but must not require a Cardholder to provide additional identification information as a condition of Card acceptance, unless such information is required to complete the Transaction, such as for shipping purposes, or the Standards specifically permit or require such information to be collected.

I’ve occasionally bought cards with a credit card in my wife’s name but I’ve also been turned away when I try to do so, because the names don’t match.

“I’m not gonna be able to put that on a card”

One of my favorite stories involves me trying to buy a spark plug at a local auto parts store.  The total came to a little over $1 and I got out my credit card to pay because

  1. I put everything on a credit card and
  2. I rarely am carrying cash

When the employee saw my credit card, he drawled – “I’m not gonna be able to put that on a card!

This phrase has now entered Miller family lexicon, of course now overly dramatic and exaggerated.  We yell it out every time we pass the merchant in question (it’s on the way to Grandma’s house)

Again, I understand his reluctance to put that transaction on a credit card (he probably would end up losing more money to credit card processing fees than he’d make on the sale.  But that’s part of the bargain of accepting credit cards, right?  If you don’t want to do it, then don’t sign the agreement!

What do you guys think?  Am I being unreasonable?  Have you ever had a similar experience at a merchant?  Or do you have insight from a merchant or card issuer perspective?  Let me know in the comments

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