Credit Card Fees offset by Customer

We are looking at payment processor that has the ability to charge credit card transaction fee to customer. On surface this seems like a risky move for the brand, however I wonder if anyone out there has been able to position this effectively. Any success or horror stories out there?

No thanks. Don’t want to piss off my customers . I’ll work the price into my menu .

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That actually has nothing to do with any processor as the processor itself cannot charge your customers for the transaction fees.
Here are more details about charging customers:
[]ONLY YOU (the merchant) are allowed to add a surcharge (Checkout Fee) or a Convenience Fee to Credit Card transactions, under certain circumstances.
]You can ONLY charge the said surcharges on credit cards. You’re not allowed to add surcharges to debit or prepaid cards.
[]You can add convenience fee only for cards accepted over the phone or online. You cannot charge convenience fee for in store transactions and you cannot charge convenience fees for over the phone or for online transactions if your sales model is setup to work that way. This gets a lot trickier than that. You can find more information on “Convenience Fees” [B]here[/B].
]You can advertise a set product price and offer a discount for cash payments.
[]Any charges to the customer (surcharges, convenient fees, or cash discounts vs CC transactions), CANNOT EXCEED the transaction cost to you with a max charge of 4% of the total amount.
]You are not allowed to use any of the above options at the following states: Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas.
[]You are required to inform the card brands (Visa, MC, DS etc.) of your intention to apply surcharges, fill out a form per brand and make it public by posting on your website, at least 30 days prior to start charging any added fees.
]Inform your acquiring bank of your intent to surcharge as well. Different banks have different procedures; most require 30 days’ notice as well. Your merchant service provider will likely be able to tell you what needs to be done to meet this requirement.

[*]Decide whether you want to charge for only specific types of cards (such as rewards cards, which tend to carry higher costs for businesses) or for all cards issued under a brand. You must choose one or the other — you cannot charge a fee for all cards and an additional fee for card products which have higher processing costs.
Keep in mind that no service provider (the processing company) can charge your customers any of the above fees for you. All they can do is provide you with instructions on how to complete the requirements needed, to be able to charge the said fees to your customers. Any processing company can give that information.

Either way, this is a risky process in so many factors, including aggravated customers and potential sales loss.
I hope that helps clarify things :slight_smile:

This all varies by state. Before you do anything find out what is allowed in your state. In Colorado it is not legal.

we add 3% to every credit card transaction. It is legal in Nevada and we have not had one customer complain.

The problem here is some folks simply do not complain they just never come back…

Wow Thanks a million Steve. I really appreciate your insight!

I actually use a company called Advanced Merchant Services & they do allow me to do exactly that. The customer gets charged a 3.99% fee for using their credit card here. All I have to do is have a small sign on my door & by my register stating that cash customers receive a 3.99% discount. Been doing this for almost 2 years now, have had only 1 complaint. People even are surprised that I used to get charged for accepting their cards. I am saving about 6-700 a month in fees. People are less resistant to it now days I believe with gas companies charging more for credit cards. But like Bodega says some states it is against the law.

If you want to get the money back raise your price of pizza about 30 cents. That should more than cover it. Far less chance of annoying a customer.

I have been doing this for at least 5 yrs now. The majority of my customers do not care and I have many many return and happy customers. My card processor approached me about the idea and I jumped aboard, he set the whole thing up as well. All I had to do is sign and return docs to visa and master card.

I think the reason your processor was so happy to do it for you is he likely gets a cut of the charge. I had a processor try to get me to do a charge for using my portable machines on deliveries. His take was 20% of the extra charge.