Every merchant agreement that I’ve seen states that you cannot charge a service fee or “minimum” purchase. The people that do this are in violation of their merchant agreement. If someone calls to complain, their merchant account will probably be pulled. I know someone that this happened to. They had a $15 minimum charge. In my prior business, I offered a discount for cash instead of a service fee for credit. (probably still could’ve lost the merchant account)
How about, “In order to enable us to keep providing credit card service, we request that you do not use your credit card for purchases under $10”? It worked for a couple of stores with whom I used to consult.
Paypal has come up with something in the last couple of years; a straight 10% with no per transaction fee for micropayments. Maybe places which specialize in under-$10 purchases can get some kind of micropayment deal?