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Old 08-08-2019, 01:16 PM
 
1,341 posts, read 1,055,264 times
Reputation: 2442

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Hi Everybody,


Our customer base loves paying thousands of $$ with their credit cards. We are currently implementing this convenience fee, that becomes more and more common, - specifically, a fee for using credit cards when other payment options are available.


I'm looking for information about whether or not it is possible to apply these fees for purchases of specific types of merchandise, or to treat different volumes of transactions differently (like, not charging a fee for under $500), or freeing residential customers from it, while still demanding it from businesses.
So far I found that our state (AK) didn't produce any regulations regarding this type of fees.


So, I would like to ask this great collective brain - did anybody recently do a research on legal aspects of such fees? Can you point me to something important? Did you, maybe, saved a couple of links to good sources of information? Some federal level regulations?


Thanks
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Old 08-08-2019, 06:09 PM
 
18,900 posts, read 57,513,980 times
Reputation: 33638
Read your merchant agreement with the card providers. Charging a fee to use a card can make the card companies refuse to allow you to accept cards. A few small businesses might get away with it for a while if they use a third party aggregator service, but the whole concept of cards is to make them MORE easy to use than cash. You build in the extra cost and deal with it.

What I used to suggest for my POS system customers was to only accept cash, and have an ATM in the lobby of their theatres for people who wanted to pay with credit cards. That way, THEY got the dollar ATM fee, the customer got cash, and there was no drain on profits. That would no longer work, as too many people use plastic of some sort to eliminate those transactions.
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Old 08-08-2019, 06:42 PM
 
Location: Southwest Washington State
26,591 posts, read 17,178,100 times
Reputation: 40548
I think you need to consult an attorney.
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Old 08-09-2019, 07:12 AM
 
5,146 posts, read 3,427,044 times
Reputation: 10471
We've been accepting credit cards for nearly 30 years and every merchant card agreement has made it clear that you are not allowed to charge extra fees if they use a card.
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Old 08-09-2019, 07:20 AM
 
80,538 posts, read 78,800,583 times
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Under a court settlement that went into effect in January 2013, retailers in many states are allowed to add a surcharge to credit (but not debit) card payments made by Visa and Mastercard. Currently, merchants can pass along fees in the form of a surcharge equal to what they pay to accept the card, up to 4 percent.

10 states ban surcharges. California , Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Within each of the fee structures, there are some key differences to be aware of. These include a convenience charge and a credit card surcharge. Although they sound similar, the application of each differs.
Convenience Charges: These can be passed off to a customer only if it is not a standard service the merchant typically provides. For example, if a theater is offering the option to pay by phone or online, a surcharge may be applied since the buyer has the added convenience of buying outside the merchant’s physical location. These fees must be flat or fixed and must be included in the total transaction amount.
Across the credit card networks, however, these fees vary, and merchants must only charge with what each of their payment partners allows.

Surcharge: This fee is more cut and dry. Surcharges apply to retailers who choose to build a fee into the cost of the purchase when a customer uses a credit card for payment. In some cases, it’s common to see merchants offer a discount for customers willing to pay in cash.

Another interesting point about the settlement is that if a merchant adds surcharges for Visa and MasterCard transactions, they must apply it to American Express cards, too. But that may also put some merchants in violation with their agreements with Amex, which complicates the equation.

Can You Charge Customers a Fee for Using a Credit Card? (as of 2018)
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Old 08-09-2019, 10:21 AM
 
1,341 posts, read 1,055,264 times
Reputation: 2442
Quote:
Originally Posted by KaraG View Post
We've been accepting credit cards for nearly 30 years and every merchant card agreement has made it clear that you are not allowed to charge extra fees if they use a card.

Quote:
Originally Posted by harry chickpea View Post
Read your merchant agreement with the card providers. Charging a fee to use a card can make the card companies refuse to allow you to accept cards. A few small businesses might get away with it for a while if they use a third party aggregator service, but the whole concept of cards is to make them MORE easy to use than cash. You build in the extra cost and deal with it.

Thanks, it's a bit outdated... Even governmental entities charge a CC fee now.




Quote:
Originally Posted by mathjak107 View Post
Under a court settlement that went into effect in January 2013, retailers in many states are allowed to add a surcharge to credit (but not debit) card payments made by Visa and Mastercard. Currently, merchants can pass along fees in the form of a surcharge equal to what they pay to accept the card, up to 4 percent.

10 states ban surcharges. California , Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Within each of the fee structures, there are some key differences to be aware of. These include a convenience charge and a credit card surcharge. Although they sound similar, the application of each differs.
Convenience Charges: These can be passed off to a customer only if it is not a standard service the merchant typically provides. For example, if a theater is offering the option to pay by phone or online, a surcharge may be applied since the buyer has the added convenience of buying outside the merchant’s physical location. These fees must be flat or fixed and must be included in the total transaction amount.
Across the credit card networks, however, these fees vary, and merchants must only charge with what each of their payment partners allows.

Surcharge: This fee is more cut and dry. Surcharges apply to retailers who choose to build a fee into the cost of the purchase when a customer uses a credit card for payment. In some cases, it’s common to see merchants offer a discount for customers willing to pay in cash.

Another interesting point about the settlement is that if a merchant adds surcharges for Visa and MasterCard transactions, they must apply it to American Express cards, too. But that may also put some merchants in violation with their agreements with Amex, which complicates the equation.

Can You Charge Customers a Fee for Using a Credit Card? (as of 2018)
Thanks a lot, I got this much, except for AMEX part, from my research on the issue. But we have different products and different kinds of customers, so we'd like to go easy on residential ones but charge businesses in full, and I'm wondering if this kind of discrimination is allowed. We are mostly living in 20th century, by how we sell our products, and we interact with customers on every sale, in person.
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Old 09-25-2019, 07:24 AM
 
Location: Gulf Coast
309 posts, read 636,401 times
Reputation: 518
While I understand this increases the cost of doing business, choosing to accept credit cards IS a cost of doing business. I've noticed more places around here implementing this fee, and I avoid patronizing them. I guess it's frustrating as a consumer. I'd rather see a subtle menu item price or product price increase vs. a "slap you in the face" fee as a penalty for using a credit card. We are a more cashless society today. Cash is a hassle, and there is no protection using cash. The cash paying customers then complain and say they should be given the incentive since they lessen the cost of the merchant. You'll either need to increase revenue (increase sales prices) or decrease expenses if the fees are cutting too much into your bottom line. It's almost like beginning to charge extra for napkins, toilet paper use in the restroom, etc.
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Old 10-08-2019, 01:15 AM
 
Location: VA, IL, FL, SD, TN, NC, SC
1,233 posts, read 341,092 times
Reputation: 2755
I would also look very carefully at you state and local government very carefully not so much for the current ordinances and laws but more what they might morph into. One of the communities I use to do business in has a real bug up their *** regarding disparate impact, which they don't prove, the accusation is enough to get you negative press in the paper and have to defend what may amount to nothing in front of the various departments and city council.
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Old 01-08-2020, 06:23 AM
 
16 posts, read 3,253 times
Reputation: 18
I think there is no single answer to this question
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