credit card convenience fee / surcharge ?

[PaulLovesJamie]

I've been thinking about charging my customers for the credit card fees, I'm wondering a couple things:
a) anybody currently doing this, and can share your experience?
b) anybody know more about this than I do??

I did some googling, and apparently "its now OK to pass processing fees on to your customers" is true but a little misleading. Here are some of the conclusions I've drawn based on what I'm seeing:
-- "convenience fees" are not legit in our circumstances.
-- "surcharges" are ok (seems like legalese semantics to me)
-- cannot exceed 4%
-- cannot exceed actual amount paid to VISA/MC for each transaction (so a flat amount is probably not OK?)
-- cannot charge it on debit cards
-- cannot charge it on any form of prepaid cards
-- must post notification at entrance to business
-- must post notification at each point of CC acceptance
-- must register intent to surcharge with visa & MC

Seems to me that the "court settlement" doesnt really give us much, too many rules.
Anybody know more about this than I do?

 

[mjwalsh]

I've been thinking about charging my customers for the credit card fees, I'm wondering a couple things:
a) anybody currently doing this, and can share your experience?
b) anybody know more about this than I do??

I did some googling, and apparently "its now OK to pass processing fees on to your customers" is true but a little misleading. Here are some of the conclusions I've drawn based on what I'm seeing:
-- "convenience fees" are not legit in our circumstances.
-- "surcharges" are ok (seems like legalese semantics to me)
-- cannot exceed 4%
-- cannot exceed actual amount paid to VISA/MC for each transaction (so a flat amount is probably not OK?)
-- cannot charge it on debit cards
-- cannot charge it on any form of prepaid cards
-- must post notification at entrance to business
-- must post notification at each point of CC acceptance
-- must register intent to surcharge with visa & MC

Seems to me that the "court settlement" doesnt really give us much, too many rules.
Anybody know more about this than I do?

Paul,

You have probably seen this one via googling: http://www.cardfellow.com/blog/charging-customers-a-credit-card-convenience-fee-at-check-out/ I see what you mean by all kinds of "paper doll world wordsmith" technicalities including some differences in individual state laws regarding how charging for credit cards can occur.

I have definitely seen in our area gas stations offering 10 cents off per gallon as a discount for non CC ... usually limited to a Sunday & with a coupon & they appear to attract significant business by doing so. Yours & Jason's post reminds us that we will have to update our Mobile PayPal readers to EMV ready readers before too long or switch to Square for our CoinCo Paper Tokens. BTW we normally tell the fellow business customer that they will get a discount on the coupons if they pay by check or cash ... adding that even by paying by CC ... it is still a better deal than the other car washes here in town. I hope this does not start a local price war (yipes!) as a result of me posting this.

Not to hijack the focus of your thread ... I am just thinking out-loud ... but I am wondering if a whole flood of businesses will be allowed to avoid the "much talked about" liability shift for non EMV cards ... by simply making sure that the non chip encryption happens BEFORE their reader outputs WIRELESSLY the private information (the larger issue???) received from the non EMV magnetic strip swipe ... saving them from replacing their non EMV readers???

mike

 

[Jeff_L]

When I first started accepting cc in the bays, my processor told me I couldn't charge a different price per minute depending on the payment method. I do believe this is why gas stations no longer offer a price difference if you pay cash. However, no one told me my start value couldn't be different. I'm $1.75 to start with quarters, $3 minimum with cc. I'm not charging any surcharge, but I'm making sure if a cc is used I'm getting enough to make it worthwhile. Before coming up with my minimum, I wash multiple cars to average the amount of time. $3 fit right in the range.

 

[chaz]

If you are trying to make it as easy as possible for customers to use your facility (I do) then taking coins and bills AND credit/debit makes sense. To then punish your credit/debit customers doesn't make sense. Yes credit has fees, but cash requires other handling like counting, separating, and taking to the bank. At my wash, all price is same cash or credit. I do have a count up on S/S that results in higher spend. I average all my expenses CC/debit and cash handling time to arrive at my pricing.

 

[MEP001]

I don't know for sure how it all works, but you can charge extra for cards whether you add a fee or charge more for the item purchased. It used to be illegal but they lifted that a few years ago. I give one less quarter's worth less time at startup which covers about half the fees, and it racks up 50¢ at a time which means on average they're overpaying another quarter when they're done.

 

[Earl Weiss]

You are not punishing them, you are rewarding cash paying customers whose transactionl costs are less passing thru the appropriate cost to the appropriate customer rather than having cash customers subsidize the credit cost.

 

[pgrzes]

I charge the same per minute on my CC's. But I have higher minimums on them for my bays I am $2 start for tokens or cash but $3 for Cc. For my vacuums I am $1 start but $2 for Credit cards. I just put a crypto swiper on my token machine that is set to only swipe $5. I have had no complaints at all. I figure with the lack of having to handle any $$$$ I dont need to charge a fee.

 

[chaz]

Exactly, cash Handling (although not a clear % as CC) does have an associated cost/time/risk factor. I reward all my customers by prividing a great, clean facilty with quick attention to any issues. I treat all paying customers equal. Free loaders and dumpers, that's a different story.