Merchant accepts deposit via credit card but not for balance (cash or debit only)

[ells]

Quick query. Has this ever happened any anyone? Basically the merchant accepted our credit card to pay the deposit but refuses to accept the same credit card for paying the balance (about $8000). They are claiming the CC fees are too high for this amount. I know some places have cash and carry prices but this is not that type of store. The CC in question is Mastercard and it has sufficient balance to pay off the invoice.

Is the merchant within his right to refuse this type of payment?

[pitz]

Yeah car dealers do it all the time on cars. A CC transaction costs between 1.5% and 3%, depending on volume, risk profile, risk management and risk assumption that a merchant undertakes.

CC's are not 'legal tender for all debts, public or private', so a merchant is under no legal obligation to accept a CC as payment for goods or services.

[heymike]

I have seen this all the time; deposit to get you to commit and cheque to save cash/prevent chargeback. I understand it as we work on commissions, so 1.9 to 2.5% off the top can cut into things. If it is a reputable company and you don't need the financing it is not a big deal.

As long as they do not charge you a premium for taking the credit card; they can do as they wish. Premiums are a standard in most merchant agreements; Visa & MC try to prevent them. That is why you see "posted prices include discount for cash purchases" and the like.

[ells]

Thanks for the information. We talked to the merchant and all is well. I understand their position. I just suggested they make that point clear up-front when discussing prices.

[number84]

Thanks for the information. We talked to the merchant and all is well. I understand their position. I just suggested they make that point clear up-front when discussing prices.

may we ask what kind of merchant (ie., car dealer, etc)?

[ghostryder]

Is the merchant within his right to refuse this type of payment?


Generally no. In most cases it is a violation of their merchant agreement which can result in their privileges being revoked.

"Do Not Set Restrictions on Credit Card Transactions
Visa regulations prohibit establishing a minimum or maximum purchase amount,
and charging customers an extra fee for using their Visa card.
Because of the available line of credit and the purchasing freedom that credit cards
offer, customers who use credit cards to pay for purchases usually bring in more
business than those who pay with cash. Therefore, you should encourage their
business and not penalize them by charging additional credit card usage fees.
Such a policy would violate your Merchant Services Agreement."

http://www.tdcanadatrust.com/merchantservices/pdf/Merchant-Guide.pdf

[ells]

Hmm my last post is MIA. It was a Kitchen and Bath store. Not a chain store just a local company.