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Charging customer for credit card fees


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I want to set up a site for dealers only and I want to be able to add the fees our merchant account charges us for credit cards. We will put a big explanation on the check out page, if they choose "write an online check" there will be no fee.

 

How can we add a percentage only if they choose credit card payment and have it show up on the "confirm total" page?

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If you're in the US what you're doing is against your merchant account agreement and Visa will pull it in a heartbeat. As a merchant, I wouldn't do business with anyone that tried to pull this stunt (and I'd report you to Visa). :wink:

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I did not realize it was such a big deal. Seems logical that if you are selling a product wholesale, that you could pass along any costs that are incurred in bringing the product to the purchaser. For instance if there is workmans comp insurance for installation, then you charge for the insurance costs in your bid for the job.

 

I was thinking like a Contractor and not as a merchant. I will read my merchant account info and educate myself.

 

Thanks for the heads up.

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I'm not sure this is agains the TOS. I went to a local store that had a $3 service fee if you used credit card. They told you this when they took your credit card.

 

I thought this was against the TOS. So I called Visa. They said it is ok as long as the tell you ahead of time.

 

Still seems fishy to me.

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I was going by my logic. As Spock would say. It is logical to tell the customer these are the charges -Do you agree with them? Then add them up and close the deal.

 

It is also logical that NOT telling them up front would be wrong. That is IF you are tacking on a credit card charge to their total. Of course, if you are just absorbing the cost in your overhead and you've built that into your retail price, fine. I am just saying that doing business on a wholesale level on a website it seems logical to lay out the costs to your dealers and offer them the "online check" as an option to save the credit card fee.

 

Could you explain what you mean by "seems fishy"?

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It's certanily not wrong here in the UK, and many merchants (especially trade outlets that only sell occasionally to the public) will charge a %age for credit cards. Smaller shops also charge a fee for accepting cheques !! Again, all OK, as long as it's made plain in advance.

 

Anyway, there's a contribution "payment surcharge" that should do as you want. It's set up for paypal, (which i needed it for) but is easilly amendable.

 

You may wish to amend your credit card payment module language file so that it includes a warning "(subject to surcharge)" on the page where you select which payment methods yo uaccept.

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As a merchant I was told by Visa/Mastercard/American Express/Discover ..

 

1. You can not say "minimum X amount to use a credit card."

 

2. You can not charge a fee for use of a credit card. When I bought my first computer, there was a 5% additional charge for use of Amex. I paid it, then called Amex to complain and they issued a credit. When I purchased more computer parts, I was charged an additional 5%. I called Amex again to complain. Next time I went, they did not accept Amex. I used my Mastercard, they charged me 3% as a fee. I called Mastercard and was credited that amount.

 

I no longer purchase from them :)

 

About 15 years ago I got a $200 cash advance on a Visa card. The bank I went into charged me a $2 fee for this. When my statement came in, I called up my credit card bank and complained, and they told me THEY charge a fee for me to do this but no one else can.

 

With all the new Visa regulations, you're crazy to try to pull one over on them :)

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I am not suppose to say that but if you ......... all your articles by 3% and say to customers ..... We will give you a 3% discount if paid cash ! :wink:

 

The_Bear

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Some of you are obviously missing the point.

 

According to Visa's (et al) rules you cannot charge a fee for using a cc, offer a discount for using other than a cc or offer something as an incentive to not use a card. In other words, a credit card customer must receive the same consideration as any other customer. Period! There isn't any way around it. They'll shut you down in a heartbeat.

 

That's the cost of doing business. If you can't afford it you shouldn't be in business in the first place.

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Some of you are obviously missing the point.

 

According to Visa's (et al) rules you cannot charge a fee for using a cc, offer a discount for using other than a cc or offer something as an incentive to not use a card. In other words, a credit card customer must receive the same consideration as any other customer. Period! There isn't any way around it. They'll shut you down in a heartbeat.

 

That's the cost of doing business. If you can't afford it you shouldn't be in business in the first place.

 

actually in most merchant agreements say NOTHING about fees/discoutns for OTHER payment options, only you can not charge a surcharge on THEIR payment solution,

 

and it is also illegal in most states to charge a surcharge, but not to offer a cash discount......

Michael

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I believe I can't charge a surcharge, but IF I offer a discount for using something other than credit cards, it has to be for ALL credit cards I offer. In other words, I can't say "20% discount if you pay cash or use Discover" if I also am authorized to use Visa and Mastercard.

 

If I say "free product if you pay with a check or money order" that is fine.

 

You just can't single out one credit card; all have to be handled equally.

 

My pet peeve is businesses who say "minimum $10 purchase with credit card" and when I tell them they can't do it, they try to argue with me.

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The way it actually reads is that a product has to be the same price whether a customer is paying by cash, check or credit card. Ask Visa if you don't believe me (I have so there's no reason for me to again). :wink:

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Actually you can charge a fee or offer discounts for certain payment methods - for example. You cannot charge Paypal users a fee unless you have a fee on all the methods of payment. So, no one is payng cash online - not logical and certainly not smart if you are allowing this,

that means that all other payment methods have a surcharge. So decide on a flat surcharge and then raise your prices by that or set your system to offer a discount based on payment method without alerting them that you are doing that. So if they pay by check or whatever, you give them a congratulations you won a x% discount.

 

For some sites, they do charge payment processing fees by getting the members to agree to this before hand. THis is mainly done by non-profits.

 

Also, a lot of countries all ow processing fees to be charged to the customer.

 

There are several mods in contributions that allow you to a)give the discount or b)charge the surcharge.

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actually the loop hole is that although you cannot charge a surcharge for accepting a credit card payment, you can however issue a discount for a cash transaction.

 

So $3 charge for accepting credit card is not acceptable

 

$3 discount for paying in cash is acceptable.

 

 

strange as it may seem but Visa/MC are very clear:

 

you CANNOT charge a fee in order to accept a credit card - why - it will discourage credit card use

 

you CANNOT require a minimum purchase amount in order to accept a credit card - for example - $15 minimum required for credit card purchase.

 

pretty cut and dry. I would recommend however that if you want to "cover costs" you simply bump your pricing to cover any expected or unexpected costs regardless of how you are paid .... this way your backend is covered ....and you aren't charging extra for a credit card purchase....

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So the way I am interpreting your responses is that if we do not say a thing we can say that if you pick up the product at our store and pay cash you will receive a cash discount. Is that correct?

 

And if they pay by a check we can offer them a cash discount. correct?

Is this only for a physical check mailed or brought into the store or can we give them the cash discount for an online check also?

 

Now the paypal thing can be a cash deal, right? I belevie they pay thru paypal with cash, so can we offer a cash discount for paypal cash or are we getting charged by paypal (or does the customer get charged by paypal)?

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you also get charged by paypal. the safest bet is to simply increase your pricing by whatever percent you feel would cover the extra charges when incurred and let the rest be.

 

most people offer a discount if they buy online vs purchasing in the physical store, but as long as you don't mention that there is a fee to use a credit card you are ok.

 

yes cash/check are the same - with an online check however you will still be paying fees on the check conversion - maybe lower or equal to a credit card but there are still fees...

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