Natural Foods Merchandiser

Credit card rules prohibit minimum purchase

To the Editor: I read with great interest your article entitled ?Cost of credit drives retailers crazy? (The Natural Foods Merchandiser, September 2005). I agree with almost everything you have said in that article, except I believe you are encouraging illegal actions which could cost retailers the right to offer credit card service.

I work as the financial manager for The Williamson Street Grocery Cooperative. In that capacity, I am aware of the contract my organization has signed with our credit card processor. The agreement is called ?NGA [National Grocers Association] Supermarket Industry Merchant Agreement Electronic Authorization and Payment,? which we had to sign in order to offer credit/debit card privileges at our store.

I would like to quote a passage from the first article of the contract called ?Acceptance Of Bank Cards,? which states the following condition of use: ?Merchant shall not establish minimum or maximum transaction amounts as a condition for honoring the card, shall not impose any surcharge in transactions, shall not make cash advances, and shall collect any tax required in the total transaction amount and not separately in cash.?

In your story, you list actions that some merchants are doing which are in direct contravention of the standard supermarket agreement that all retailers are ?forced? to honor if they want to carry plastic.

I for years have considered that clause the most onerous clause in the supermarket contract. If the majority of our customers stop using cash for small purchases, we will see our credit/debit card costs triple.

Do you not think you owe your readers the information that the retailers who tack on fees or refuse to honor credit cards at under $10 are breaking their contract? Those merchants who do break the contract are trying to get competitive advantage over ?honest merchants? who would love to do the same but know we could lose plastic privileges.

Thank you for considering my comments.

Gene Hahn
Financial Manager
Williamson Street Grocery Cooperative
Madison, Wis.

Natural Foods Merchandiser volume XXVI/number 12/p. 11

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