"Minimum card swipe" does not exist, Wendy Knowler explains

Don’t let a retailer charge you extra for card payments, or dictate how much you must spend, says Wendy Knowler in this week’s Consumerwatch.

 IT’S ILLEGAL!

Someone asked on Twitter this week: “Can retail stores compel a customer to spend a minimum amount for card transactions? For eg. no card transactions below R50?’

Some who responded thought they did have the right to do that, so clearly many consumers aren’t at all sure about their rights in the face of such retailer rules.

And that’s hardly surprising - the "minimum spend on card” thing has become common practice in many smaller stores, fuel station shops, and the like.

Some also think it’s okay for them to make their customers pay their bank fees for card transactions - they add a percentage, usually 5%, to the advertised or marked price of a product if a customer chooses to pay by card. 

It’s a contravention of the Consumer Protection Act, which states, in brief, that the advertised price may not be inflated. It also violates their merchant’s agreement with their bank, which states that they may not pass on their bank fees to their customers.

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Imposing a minimum spend for card payments is not covered by the CPA, but both Mastercard and Visa prohibit merchants from imposing a minimum transaction value on credit card payments. 

I asked the Banking Services Ombudsman whether that also applied to debit card payments. Assessments manager Edrich Buytendorp kindly canvassed the banks on my behalf and came back with this:

“The banks have confirmed that for any card transaction, whether debit card or credit card, the merchant is not entitled to require a minimum payment.  The merchant could lose their card machine all together if they are found guilty by their bank of this misconduct. Banks wont know this is happening and it is up to the individual to report it to the acquiring bank."

So there you have it. If a retailer expects you to pay extra for paying by card, or has imposed a minimum spend for card payments, report them to their bank. Their POP machine will be branded by the bank, so that’s how you know which bank to approach.

READ MORE: Consumerwatch: Buy now, cry later

What your car colour choice tells your insurer about you

I knew that white cars contribute to a lower premium, but until this week, I didn’t know why.

I had assumed that it was due to the fact that white cars are more visible on the road, and hence less likely to be involved in a collision, but according to Christelle Colman, MD and founder of Elite Risk Acceptance, part of Old Mutual Insure, the risk is related not to the car but to the driver.

White and silver are considered conservative colour choices, Colman said, while black and red, in particular, are regarded as “more racy”.

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“So someone who chooses to drive a black or red car is deemed by insurance actuaries to be more aggressive drivers, and therefore more likely to have an accident,” she said. Hence the premium is loaded.

Think black VW Golf GTi versus a white Polo.

Of course, your premium is far more impacted by your age, type of car and its engine size, and your insurance history, but it’s good to know that colour plays a role, too.

As does your marital status. Yes, if you’re married, man or woman, you’re deemed to be more settled, out on the town and on the roads at night less, and therefore lower risk.

Gender plays a huge role in risk determination, Colman says.

“Women take fewer risks, are more careful in their decision-making, hardly ever exceed the speed limit, and shy away from any form of road rage. Statistics show that women have fewer accidents, and the accidents they do have are less severe,” she said.

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“Considering that the cost of repairs is one of the biggest driving factors when it comes to pricing motor insurance, it is easy to understand why women are charged less. Statistically, the damages incurred by women simply cost less to repair,” she explains.

“It’s worth stressing that this phenomenon is not limited to South Africa, and the trend is well established and accepted as fact around the world.”

Good to know!

Here's the full podcast explaining these: 

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