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Legal loophole in sign commonly seen at checkouts

Every week we will break down, debunk and demystify your rights as a shopper in Australia. This week we are looking at the legality of businesses having minimum purchase amounts for customers wishing to use eftpos or card-based payments.

We all know life is getting more expensive than ever before, and how important it is to stretch every dollar you make.

That's why each week we'll answer a question surrounding what shoppers are – and aren't – entitled to when dealing with retailers, restaurants and manufacturers.

MONEY MATTERS: Is it legal for a shop to refuse cash as payment?

$10 minimum spend?! That's highway robbery!

Hi Stuart,

I have a consumer question for you – at my local cafe they have a minimum spend for eftpos transactions of $10.

I don't get paid in cash and rarely have it on me, which means I'm always forced to buy a muffin or a sandwich and really I only want a coffee.

Are businesses allowed to do this? Surely a small surcharge is enough?

MONEY MATTERS: Is it legal for a shop to only accept cash as payment?

The short answer is yes, businesses are allowed to have minimum spend amounts for eftpos purchases.

According to Australia's consumer watchdog, the Australian Competition and Consumer Commission, a minimum spend amount doesn't even necessarily have to apply to eftpos.

"Yes, businesses are allowed to set a minimum transaction value for the acceptance of EFTPOS cards (or other cards if they wish)," the watchdog notes. 

"They don't have to offer a card payment option, but they need to comply with the excessive surcharging rules regardless of the cost of the product."

Fundamentally, businesses are allowed to set the terms of the transaction as long as the prospective customer is aware of it prior to the transaction commencing.

MONEY MATTERS: How to get a refund if you've lost the box

That means they are allowed to refuse cash, accept only cash, ask for minimum spend amounts and more – as long as it is made clear.

Obviously from a business perspective, the more stipulations you put on a customer the less likely you are to make a sale, but that's for the free market to decide.

There is one rule that applies to businesses placing clauses on card payments: they are not allowed to charge a surcharge that is deemed to be "excessive".

In simple language, a business can only charge a surcharge for card payments that covers the cost of accepting the card. They cannot make a profit from the surcharge.

Obviously a $5 or $10 minimum spend covers all that – and more.

Do you have a consumer question you want answered? You can get in touch with reporter Stuart Marsh at sm****@******om.au.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.