Post Office Charges a Penny

Entry from credit card statement showing $0.01 charged by the post office
Credit card companies charge merchants a series of fees for each transaction, that’s how they make their money. Because consumers demand to pay with credit cards, and because consumers are likely to spend more money, merchants are happy to pay a monthly connection charge, a fee around $0.35 per transaction, plus a percentage of the transaction – normally 1.5%-3.9%.

Obviously, the transaction fees can be higher than the transaction amount when you are dealing with very small transactions. I have noticed that buying a single copy at Kinko’s will not be charged to my credit card. This makes sense because the $0.09 transaction would likely cost Kinko’s more than five times that to process, so they might as well give me the service. Likewise, back before Kinko’s went completely automated, a clerk would be likely to give you a copy rather than make change for a dollar and print a receipt.

I wonder if the post office is getting some sort of special consideration from the credit card companies, or if the machine is just not programmed in a way that makes sense. Should the post office charge people for unprofitable transactions just to prevent people from running scores of free transactions? Did they decide to run the risk of loosing money? Or is it an oversight?

More interestingly, I wonder how many other automated payment systems respond in a similar manner. What is the cheapest item you can buy at Home Depot to test their automated checkout? How fast do I have to be at the gas pump to get just a few pennies worth of gas? And is it possible to exploit this system to do financial damage to a company on any meaningful scale? Supposedly O.J. Simpson was bankrupted by protestors calling his toll-free number and running up a bill. Will the chain-email that tells me to “boycott gas stations on Thursday” change to “buy gas $0.25 at a time?”

A final thought is that gas pumps typically “authorize” the credit card and block a preset amount per transaction. This is to make sure your credit card is good for a tank of gas before it pumps it. The pump later “captures” the correct amount, but frequently leaves the authorization in force until it expires. How many of these repeat transactions does it take to block your card? Might be a test for my $15,000 limit Gold Card.

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