Merchants who impose surcharges on credit card purchases or accept cards only for purchases larger than some minimum sum are probably losing potential sales, a recent survey commissioned by MasterCard International Inc., shows.

The telephone survey, conducted by AHF Research of New York, polled 444 people ages 18 and older. AHF Research assessed the impact of transaction minimums and surcharges on consumer attitudes and perceptions of merchants.

The results are being distributed to acquiring banks so that they can pass the information on to merchant customers.

Violations of Standards

Imposing surcharges and minimum transaction amounts violate MasterCard's and Visa's acceptance standards.

"The argument that some merchants have made is that they pay a discount rate for [credit card] acceptance, and that justifies," any charges or minimums they require, said Andrew Cheskis, MasterCard's senior vice president of franchise management.

The survey found, however, that 41% of the people polled who experienced transaction minimums would decrease their patronage of merchants with such a policy, and 25% said they would stop shopping at such a merchant.

Similarly, 52% of the people surveyed who experienced surcharges said they would decrease their patronage of merchants assessing fees, and 37% said they wouldn't patronize offending merchants.

The majority of these customers said that encountering charges and minimums caused them annoyance.

The survey also showed that people 18 to 34 years old, with a median income of about $46,000, were more likely to encounter surcharges and minimum transaction amounts than people with lower incomes in higher age groups.

MasterCard says that its compliance program has been successful in the last year, encouraging consumers to write letters, informing the association of merchants who impose minimums or add surcharges. New York-based MasterCard began publishing an address about a year ago, and says it has received 2,000 complaints, many more than in previous years.

Small Percentages

Still, Mr. Cheskis conceded that MasterCard does not have a big problem with noncomplying merchants, because only 3% of the consumers surveyed said they had experienced a minimum transaction policy in the last six months and 2% said that they encountered a surcharge over the same period.

When MasterCard becomes aware of such merchants, it contacts the acquiring bank, issuing a warning that allows merchants to correct the situation in 40 to 60 days. If after that period the merchant is still violating the association's rule, MasterCard fines the acquiring bank $2,000, and continues to do so in 40-to-60-day increments, assessing higher fines until the merchant complies.

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