Echo Park shopper learns it’s ‘buyer beware’ when it comes to credit card purchases

Nathana, an Echo Park resident, stopped by the House of Spirits liquor store a few weeks ago and bought $11 worth of merchandise. But, much to her surprise, she was informed that the House of Spirits requires credit card users to buy at least $20 worth of goods or pay a 50 cent surcharge. Nathana told the employees that the policy and fees violated federal and state laws. The employees were not pleased:

I informed them that they are breaking the law and they almost kicked me out of the store! I reported them to various agencies who are going to look into it because they are not only violating the law but they are charging people to use their credit cards for purchases below $20 which is illegal. Can you imagine how much money they’ve made on their charges?

The House of Spirits is far from the only neighborhood merchant following such credit card policies. Retailers – including independent neighborhood stores – have long complained that credit card processing fees often leave them with little or no profit on low-priced items, forcing them to impose minimums or fees.  Those policies have irritated many shoppers, including the blogger behind Atwater Newbie,who earlier this year wrote about challenging an Atwater Village car wash over its $8.99 credit card-purchase minimum.

A new federal financial law does permit merchants to impose a minimum $10 minimum on credit card. But, as Atwater Newbie pointed out in a follow up story, California as well as some credit card companies like Visa  prohibit check out fees on credit purchases.

Back at The House of Spirits, a pair of signs advising buyers of the $20 minimum credit card purchase policy still hang over the cash registers. A clerk said this morning that a manager was not available to talk about the policy.

Related Post:
New credit card laws help merchants but what about customers? WalletPop

Photo by Colin/Flickr


  1. same policy at A-1 Grocery on Sunset… i believe the charge is $.75 there. SCANDAL!

  2. Great use of the neighborhood blog! People putting the tribal configuration to work for them. I absolutely love it. Great blog. Power to the people!

  3. What about debit cards? The link says they’re included in the federal law, but California code (from the skimming I’ve done) doesn’t say anything about debit cards. Does federal law always supersede State law?

  4. Smarter to just raise prices across the board, and offer a discount for cash payment. Carrot >> Stick, and it’s legal.

  5. Personally I would never buy booze at House of Spirits anyway because their selection is lousy and overpriced. BUT it seems like lots of retailers in this hood do this, especially gas stations.

  6. Thank you eastsider! I’ve always been annoyed with their 20$ minimum. I just filed a complaint form against them as well. And I also filed a complaint form against A-1 Grocery and the Arco on Glendale and Berkeley. We need to take a stand!

  7. Actually, james and ryan, A-1 Grocery charges to use your debit card not your credit card. I used to be the other way around about 4 months ago but I think they got wise to the law.

  8. Just can’t get enough, can you? This is better than forcing cash users to pay for your credit card rewards and merchant processing fees.


  9. While we’re venting on the subject, Second worst offender:
    Postalworks in Silverlake (next to Trader Joes) with their (illegal) $10 minimum.
    That and they treat everyone like a potential shoplifter.

  10. For all of those poopooing on the stores for charging a minimal fee, I guess you would rather them go out of business than cover the expenses you give them for your convenience, correct? oh wait, let’s have them raise their prices on everyone so you don’t have to be inconvenienced by paying in cash for your booze or whatever else. And in the end, the only ones that make out like a bandit are the credit card companies and the big banks. At least Kim came up with a solution.

  11. as your story sort of points out, there is nothing illegal about minimums, it is just a violation of the standard merchant agreements. the new federal law would actually change this, allowing merchants to set a $10 minimum. a surcharge is illegal under california law (and the merchant agreements), but not federal law to the best of my knowledge.

    for retailers that see a lot of transactions under $10, i can understand their frustration and desire to set a minimum. they’re probably paying anywhere from $.20-.30 per transaction plus almost 2%, so the processing fees can quickly end up being 4-9% of a small sale, which is a hefty chunk. (american express is more costly, and so are cards with bonuses. the merchant bears the cost of those perks.)

    i can imagine how much they’re making on those charges. probably not much.

    that said, i don’t think surcharges and minimums are the best way to go for retailers looking at processing charges that start to look like a huge expense. i think some slight price increases on some items (like drinks at restaurants) would be just as effective and unlikely to raise anyone’s ire.


    Thats right . Cold hard CASH for SUCH small purchases !

    The REAL issue is consumers paying for evvveeerrrything with debit/credit card like the credit card companies WANT you to, and small businesses want you to as well !
    What are you going to do if all the ATMS went down in an emergency ? Carry cash people !
    The masses are asses !
    Genius !

  13. Unfortunately, the new federal law undermines the protections for credit card users. At least that part of the law was NOT consumer friendly!

    It also serves to undermine what had been a federal policy to promote carrying of less cash in favor of using cards instead — a big safety measure to thwart robberies, and a budget-balancing measure to reduce the need for actual dollars in hand and thus save the cost of printing them.

    This new law on use of cards is a BAD policy.

    It had been illegal to apply a surcharge on use of a credit card since the earliest days of credit cards. But starting about 25 years ago, when Arco stopped accepting credit cards saying the move was to provide for lower prices, other gas stations tried to compete by playing word games, giving a lower price for use of a credit card and calling it a cash discount rather than a card surcharge, which is all it is. That practice spread like wildfire across the country. The idea was that technically, the law only spoke to surcharges not to cash discounts — but it is the same thing. I never heard of anyone challenging it, and as everyone can see, that practice is now widespread.

    When the new federal law was just adopted, as I have read it actually allows for surcharges, not merely for cash discounts. But like I said, there is no difference other than to mislead you on price signs. So, charging for use of a credit card is now enshrined in law — undermining the good policies the former law was designed to promote.

    Still, those who argue that cash payers are subsidizing card users don’t understand the full picture. Merchants don’t have to take credit cards at all, and never have had to. They CHOOSE to, because accepting the card boosts their sales volume, and thus their profit. That is, by taking the card, they make more money, not less. They take the card because they make more money by paying the fee on it than they do if they don’t take the card, and so lose sales. So, they are NOT losing money by accepting the credit cards, as you will hear alleged.

    Geez, as an example, any department store out there marks up the wholesale price they pay by 100% to set the retail price for consumers — that is, they charge the consumer double what they paid for it! They would rather drop that to 98% by accepting a credit card than lose the sale. How many people buy because they can because they have a credit card in their pocket? They’re not LOSING 2 percent, they’re gaining 98 percent!

    House of Spirits and any others had the option to not accept any credit cards. They chose instead to break the law by plopping on a 50¢ surcharge on certain card users. They didn’t even disguise it as a cash discount pertaining to all purchases, singled out a specific category only. I have not heard of the practice by House of Spirits being legal under the new law.

    Now, under they new system, people will be pushed to drop the card and start carrying plenty of cash in their pockets. Robbers are going to like that. People will have to spend more time in line at the bank to get that cash, and so the bank lines will be longer than they already are. And the federal deficit will grow by the cost of printing all those extra dollars that must be in peoples’ hands.

    Another ill considered policy by shallow minded people.

  14. i get so used to from the hip displays of vitriol here at the eastsider, that I almost forgot there are intelligent, thoughtful people in the hood.

  15. I think its BS having to pay $1.oo to spend my money at your store if under 20 dollats. It makes me crazy. I go to the liquor store on Laviata and sunset about 5 times a week and am still charged a $1.00 if under 2o dollar purchase and it makes me crazy! And I really am not worried that either my store or house of spirts is going out of biz anytime soon. Now 10 dollars I can understand. But 20 is just rude. Its another way of getting people to spend a bit more money. Oops only 17, id better buy something else so its 20….its rude!! Thanks for reporting them and I will jump on your train.

  16. Where the hell in Echo Park is “Laviata”
    it is Laveta
    New to the neighborhood ?

    Echofish , swim back to the Westside plllleeeeeaaaasssseeE !

  17. We stopped buying from House of Spirits a long time ago because on several occasions they tried to overcharge us for our purchase. If it was a one time thing, I’d understand, but it was getting ridiculous. Worst of all they were total jerks and completely unapologetic

  18. as a small business owner, I have to say there is nothing more annoying than people whipping out there amex card for a $5 purchase.
    Amex charges merchants a high percentage to accept their cards.
    I dont have minimums or charge a surcharge on CC’s (because its illegal), but I understand why businesses do.
    Credit card arent actually a constitutional right, they are a convenience. People need to realize that its a struggle to run a small business in this economy.
    And people who are “filing complaints” against a liquor store over a $20 charge fee need to get a hobby. Pay cash or go to one of the other 30 liquor stores in the neighborhood. People are so entitled (and lazy) in this town.

  19. Yeah I agree with DOUGLAS, no kidding “I reported them to various agencies …” blah blah blah ! its your fault for whippin’ out a credit card for 11 dollars ! what a ding bat !

    Really ?

  20. I’m vocab deficient – I finally have to look up the word “vitriol”. Never heard of the word (perhaps my LAUSD education was lacking).
    This word is used often to insult people who are venting. Have only come across it on the Eastsider comments…..

  21. @huh? taking ppl to task for misspelling street names? really? get a life.

  22. Yeah , “taking them to task for misspelling a street name”
    if you are going to complain about measly credit card b.s in the huge scope of your life, and move in to a neighborhood get the street names right , yes REALLY . Its called pride in your neighborhood.
    Perhaps you would be better fit in Veverly Hillz or say Ventwood. It is so easy to weed out the newbie busy bodys gentrifers on this blog , and quite entertaining . Complaining about everything because it is not as perfect as the white bread neighborhoods they moved here from ugh !

  23. I have actively boycotted not house of spirits, but Royal Liquor for this very reason. Besides having prices sometime 50% more than House of Spirits for the same products they ALSO charge A FULL DOLLAR for debit cards. Sadly they are the only store in the neighborhood strip that stays open past midnight and would actually receive a lot of business from me and other echo park residents if they were honest business people. How do I report them?

  24. @treetops lol. looks like i struck a nerve with the eastsiderla.com comment cred police. keep up the good work, officer!

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