Charging Surcharges for cc?

Robert Young · January 28th, 2013, 06:55 PM

I know none of us that can will do this in the short term.. but there IS money involved and as such it only takes a few large corps to start and eventually it could be a standard:

From NBCnews.com today:

As of this Sunday, Jan. 27, merchants who accept credit cards issued by Visa and MasterCard will be allowed to add a service charge to the purchase price.

Visa and MasterCard had always prohibited merchants from doing this. They agreed to change the rules and allow the surcharge as part of the settlement of an antitrust suit brought by retailers.

The surcharge is supposed to equal the actual cost of processing the credit card transaction, which is typically 1.5 to 3 percent. Under the agreement, the fee is capped at 4 percent. The surcharge can vary based on the type of card. For example, it could be higher for a rewards card or premier card.

Merchants still cannot add a surcharge to debit card transactions

Credit card surcharges are banned by law in 10 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Visa and MasterCard have rules that require retailers to handle credit cards the same way in all of their stores across the country. That means a chain with stores in any of the 10 states where a surcharge is banned would not be able to have a surcharge at any of its stores.

The National Retail Federation points out that under terms of the settlement, a merchant who adds a surcharge to purchases on a Visa or MasterCard would have to do the same with American Express cards. But AMEX prohibits surcharge fees. So a merchant who accepts American Express as well as Visa/MasterCard would not be able to surcharge any of those cards

SO, if it was available to you, would you ?

EnMartian · January 29th, 2013, 11:43 AM

Why would you? Anyone who takes credit cards as a form of payment could just adjust their prices to cover the fees from the credit card companies. They're generally not that high and so the price increase isn't that much. I don't see how penalizing credit card customers is going to be a good thing.

inkman996 · January 30th, 2013, 09:03 AM

Its illegal in our state so what many retailers do is fool you by offering a cash discount. In other words the original cost is adjusted to cover CC processing fee's but if you pay in cash they give that amount as a supposed cash discount.

Robert Young · January 30th, 2013, 10:23 AM

Quote:

Originally Posted by EnMartian

Why would you?

I am sure very few retailers will to start.. but if it catches on it could be the new normal in a few years. I cannot raise my prices in digitizing... but if it were "normal operating procedure" then I personally can think of 15,000 reasons... the minimum we pay our cc processors in fees per year!

as we know our charges change based on which card our client uses... Amex... corporate cards, etc.. we have no control.

Also it is obviously in Visa/MC best interest... each percentage a retailer charges to recoup the fee is MORE money in their pockets!... at their levels just a penny a transaction adds up. and in this economy few things surprise me anymore.

A similar shakedown would be if we had to charge Sales Tax on our service or on all internet purchases.. those days may come as well.

Screen Printer · January 30th, 2013, 03:41 PM

I have a friend that has a lawn and garden business.

He always charged more for credit card service even when it was not allowed.

If your sales are $600,000 for a year....4% is a lot of money going to credit card company... $24,000....That is a car.

The way he got away with it was....

The price was $$$$$
The price was $$$$ ..............If you paid cash

So in reality he did not charge for using credit card...he rewarded them for paying cash.

Binkspot · January 30th, 2013, 04:24 PM

We charge a 3% "lost cash" charge, going to bump it up to 4% with this news. Many customers will pay cash or check once they find out there order will cost more with a cc.

Prosperi-Tees · January 30th, 2013, 05:18 PM

Quote:

Originally Posted by Binkspot

We charge a 3% "lost cash" charge, going to bump it up to 4% with this news. Many customers will pay cash or check once they find out there order will cost more with a cc.

Is that an actual line item on an invoice? Or just figured into a quote?

Robert Young · January 30th, 2013, 05:30 PM

for Digitizing Services there is NO way we could swing a "lost cash" charge at this point.. can you imagine!! lol

a few years ago our lawn service providers And our Advertising Agency had to start charging us tax... before then they were exempt as a Service... so times are changing for sure.

eetherman · January 30th, 2013, 09:21 PM

From what I understand you cannot charge more than your own interchange fee, so if its 1.5% you cannot charge 4%. I am not 100% sure on this, but from what I've read this is the case. Be careful or this could bite you in the ***.

LogoAdvantage · March 1st, 2013, 09:07 PM

Robert, speak to your processor and in your case ask him to code you as Business to Business. This saved me a fair amount on my fees but I had to prove that the majority of my business was done this way. In your case that would even be easier !