The majority of purchases inside the store were cash because we required a $5 dollar minimum purchase for accepting cards. Most card purchases were used for gas which was already a loss leader most months out of the year, so it made more sense to keep posted prices competitive with stations in the area in order to bring people into the store rather than charge a few more cents in order to offset the cost of cards.

I thought minimum purchase requirements were against the terms of service for most credit cards. I've bought plenty of < $1 items with my credit card. I try to use it for everything to "earn" the rewards.

Yes they are against TOS. Usually only mom and pop shops have a policy. No one enforces it, though. The reason is there's usually a base charge..like $.30 + a percentage fee like 3%.

So if you buy a $1 soda, that mom and pop store just lost 30% of their revenue, plus 3%, and maybe sold that soda at a lost to you.

For places like McDonalds, they negotiate much better credit card processing fees and I don't care - plus they make a lot of money anyways.

Maybe it was a violation of the TOS and the owner was not aware (or he was and didn't care), but this policy never caused us any trouble during my time running the store, although its entirely possible that we were just lucky enough to fly under the radar.

I seem to remember such TOS being ruled illegal many years ago.

I went to look at Visa rules and I think you are right. Here's one relevant paragraph:

> 5.4.2.3

> Minimum Transaction Amount – US Region and US Territories

> In the US Region or a US Territory, a Merchant must not establish a minimum Transaction amount as a condition for honoring a Visa Card, except for a Transaction conducted with a Visa credit Card issued in the US Region or a US Territory. The minimum Transaction amount must not be greater than USD 10 and must not be discriminatory between Issuers or between Visa and another payment network.

So, in the US, it doesn't look like there are any rules. Outside of the US, it looks like a minimum is fine as long as it's not more than $10

Am I reading this wrong or is it self-contradictory?

Because handling cash is expensive too, so the transaction cost was probably already priced in.