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FYI- Credit Cards & Merchant Accounts


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There have been a couple of discussions in other forums regarding the use of credit cards and merchant accounts.

 

First, whether you have a direct merchant account or use a third party billing service...there are very specific rules about how and when you can put the charge through, how the goods must be delivered, what kind of paperwork trail there has to be. READ YOUR MERCHANT AGREEMENT. Your failure to follow the procedures can result in chargebacks and the loss of merchant privileges.

 

Second, most DO NOT allow you to charge extra to cover the cost of using a credit card. For the most part CASH OR CREDIT CARD - SAME PRICE. On a personal note- I certainly wouldn't continue to do business with anyone that charged me extra because I used my card. The gateway fees, statement fees, batch fees, discount, etc. are all part of the cost of doing business. To keep those costs down, shop around and find the best deal for your situation.

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I noticed most site have extra 3% on credit cards. How did they work? Is that supposed be banned? I myself am thinking about if I should charge more on credit cards or charge less for cash. But now I am not sure if I should do that after read your notes. Another observation is that the site who charge extra on credit cards usually get more customers... Is that the rule of marketing? Totally confused!

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I might be the exception here.. but for our wholesale distributors of our products, we give them a discount (free shipping) when they purchase with a credit card. Otherwise it is on Net 30 day term. I think we figure it is worth the 2% & 35? for the ability to collect on the money in days instead of months!

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  • 1 month later...
  • 4 weeks later...

Ajeh,

There are many states where it is illegal to charge a Credit Card surcharge (California I know is one), but there are some that DO allow it. The company may be based in one of the states where it is allowed. But, if they charge someone from CA a surcharge, then they could get in trouble.

 

So, moral of this story is, if you're in CA, order a TON of stuff, and when they charge you a surchage, sue them to get the entire order free! ;)

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  • 2 weeks later...

Just for some of your reading pleasure.

 

AFAIK this is for US only.

 

I don't know about ALL credit cards.. but VISA specifically prohibits charging a surcharge for its use no matter what state you live in. MC amended their agreements to allow the IRS only to charge a 2% "convience" fee. Why in the world a company would help the IRS get more money is beyond me.. oh wait... perhaps a TAX BREAK??

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  • 8 months later...

hmmm I live in california, and theres a lot of cash stations with "cash prices" and "credit prices" for gasoline... anyways, what i am going to do is mark up my products 1.5-2% to help cover that charge, if they use an echeck i may do a "congratulations, you just happen to win 2% off your entire order" as it is real retail stores mark there products up 200-600%, me i am raising them 45-100% and i am just a tad under all my compitions prices i can find on froogle, and yahoo...

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There is NO problem in listing your prices a bit HIGH (for the reason of CC surcharge) But then if people pay by "CASH" (not by CC) give them a 2%-3% off discount. You can advertize that "CASH" price also. Seen this many times - specially in wholesale magazines/catalogs.

 

That way your not adding a SURCHARGE cause of accepting a credit card - but your GIVING a DISCOUNT if they are NOT using a credit card.

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  • 2 weeks later...

Why would someone pay EXTRA to help the IRS collect MORE? :angry:

 

Because they're HIGHLY MOTIVATED to pay (ie, pay up or see the bailiff on your way out for your personal limo ride to the state prison).

 

Or, because they have just negotiated the deal of a lifetime in the form of an Offer in Compromise (settled a tax debt for pennies on the dollar).

 

Studies have shown that government agencies bring in more revenues and faster when they take credit cards. Case in point, Nevada seems to be one of the favorite places to incorporate. Why? They will give you anything you want, and if you pay them enough, even give it to you in four hours, just give them your credit card number.

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  • 4 years later...

A forum thread that hasn't been posted in within four and a half years is a very dead thread!

 

Vger

In Australia it is legal to charge the credit card charge to your customers. It is hit and miss if you do or not. Legilslation was brought in to allow it.
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A forum thread that hasn't been posted in within four and a half years is a very dead thread!
Are these words of wisdom?

 

Peter

Peter McGrath

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See my Profile (click here) for more information and to contact me for professional osCommerce support that includes SEO development, custom development and security implementation

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