Credit Card Convenience Fee
As I roll into 2020 and review my previous year, one of my large expenses is credit card processing fees. I've renegotiated my Vantiv contract as well as looked at alternatives. Regardless, I've left over $6,000 on the table in fees.
I've noted that a lot of my customers and local businesses (restaurants, gift shops, smaller hotels) are all now starting to charge a "Convenience Fee" on credit card transactions to recoup the ever increasing fees that are paid to process the card.
After a lot of review, there are no Federal restrictions and this is handled on a state by state level.
Some states call a "Credit Card Surcharge" illegal. However those same states have no problem with a "Convenience Fee".
There then of course if your merchant processing agreement.
Regardless of that discussion, I would like to see in the system the ability to enable a "Convenience Fee" or something of that nature on credit card transactions.
From a system point of view call it an "Additional Fee" or anything you want to call it, but allow the business owner to put in either a percentage of the total sale or a flat transaction fee that is added to each invoice.
I have tested using an additional sales tax and that works, but it's tremendously misleading on the invoice and I want to be as transparent with customers as possible.
With the increasing fees that businesses pay, the huge confusion based on what card the customer uses, loyalty cards, pin verses swipe, online verses card present, I think a lot of business owners would like to lower their processing expenses and have the ability to recoup some of the fees.
Mark Balentine
shared this idea
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glen@smartguyspc.com
commented
OMG. I've been in business for over 25 years. There is a cost to handling money. Bank fees, CC fees, checks, etc, etc. Mine runs about 2.25%. You build it in to your pricing. Same as rent, electric, cleaning supplies.
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Kevin Henry Computer Connection,Inc.
commented
I add 3% additional cost to all my products to accommodate this. I also provide a 2% discount incentive to use cash. I am with you on the fees. I too pay about 6K a month. It is a cost of doing business these days and it is actually a violation of your credit card agreement to up charge for using credit cards. It is easy for you to make your own product sku called "Convenience Fee", assign no cost to it, and make it non-taxable.
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All Seasons Power Equipment
commented
This is the worst way to recoop fees. You pay fees for everything, Power to run your shop, repairshopr to manage your paperwork, credit card processor to manage money. Build it into your pricing model.
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Greg
commented
We just add a "credit card fee" line item when people use a card. They understand there is a fee involved with using the card. It's a item you can add into your inventory. You can call it whatever you want too.
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Glen Coffield commented
In the US you cannot "surcharge". It violates every merchant agreement I've ever seen. I've been in business 25 years and have multiple merchant accounts. The "legal" way is to say all prices reflect a "x%" discount. All other payment types will result in the loss of cash discount. Now having said that, doing this will cost you a lot more in lost business. It's a big turn off. It's a cost of doing business -- period. Since I started 25 years ago I have always used 2% as my cost of money. Whether its bad checks, counterfeit bills, shrinkage,there's a cost. For 25 years that number has varied from 1.85-2.25% over all. You build that into your cost model and price accordingly -no different then if the cost of a widget you buy goes up. I walk out of stores that do this and tell others to do the same. There are better processors out there,
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Allen L
commented
We currently add a line item to the ticket. This requires a little more work, but it seems to be a suitable work around at the moment. I would also like to see it automatically calculated in the lower section by the tax, because a line item gets responses from customers.
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rob
commented
I would like the same to help with rising credit card fees.
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Anonymous
commented
I have the same issue