Ever been faced with this dilemma when out shopping? You walk up to the register to pay for an item that costs $8. The cashier rings it up, and when you reach into your wallet to pull out a credit card to pay, the cashier explains that the “store policy” requires a minimum purchase of $25 when paying with a credit card. Frustrated and embarrassed, you realize that you are short on cash, do not have a checkbook, and are forced to either pass on the item or make a mad dash to the closest ATM, pull out the cash, and maybe even get hit with a service charge for using the ATM.

But did you know that retailers cannot require a minimum charge for merchandise? Here is the scoop.

Many of us think that when a retailer refuses to accept a credit card for a small purchase, it is the credit card company that is enforcing this policy. Not true. This is simply a policy that has been put in place by the store. Basically, the store is charged a fee by the credit card company for each purchase that is made by credit card. Sometimes the fee eats into the profit the retailer would make on a purchase and therefore many stores require a minimum charge to ensure that the profit will cover the service charge. But the reality is that any store which accepts Visa or MasterCard cannot require a minimum purchase. Credit card companies want their customers to use credit cards, no matter how big or small the purchase may be.

So what does a consumer do to overcome this obstacle when shopping?

Ask to speak to the manager, and explain that credit card companies do not require a minimum purchase and stores have to accept a credit card as form of payment, no matter what the amount of the charge. If the store still insists on a minimum purchase, contact the issuer of the credit card and report the merchant. Small purchases add up, and with more and more people using credit cards to rack up miles or earn points for cash or rewards, knowing the facts about what you can charge could payoff big in the long run!”