Is it legal for merchants to refuse to accept credit cards for small transactions?
In public law, i.e. under federal and, as far as I know, state law, there is no affirmative duty to accept credit card payments. Thus it would follow that merchants are free to not accept credit cards for small transactions. The reason many merchants do not accept credit cards for small dollar amount transactions is because the credit card company charges (1-3%) significantly eat into their profits on these transactions where the margins are much lower than on big-ticket items. In private law, i.e. contracts, it can be “illegal” for merchants to refuse credit card payments for small transactions. Often credit card companies will stipulate that merchants must accept credit cards for all transactions. Thus if a merchant does not accept credit card transactions for small transactions, he could be violating his private law (contractual) obligation to the credit card company. Customers, however, have little legal recourse here, as the issue is between the merchant and the credit card compan
