Credit Card fees?

bike21

Those of you who accept credit cards, do you charge a surcharge or just include the fees as a cost of doing business? Until this point, I hadn't had the need for credit cards but our latest booking wanted to pay their deposit with credit card. I used Square to do it which is really quite handy. The bride-to-be had her dad's CC info and not the physical card so I had to key in the transaction which is 3.5% from Square.

Since I had no previous forethought about this, I am eating the fees for this wedding. I was thinking in the future of putting a stipulation of around a 2% surcharge. Sort of splitting the cost a bit. But not sure what to think.

What say you? :thumb

Art Scott

Better check with your state on that....and it may be governed by the ICC....really do not remember who governs CC's......I just eat the fees...this is one thing I do not upcharge for.

A really good tax accountant would be my suggestion.

Overfocused

Even though I've never personally used CC for business, 3.5% sounds a bit high, just in general. I'd shop around before settling for 3.5% and/or talk to an accounting professional that knows about these things.

Then there's always Google. lol.

bike21

Didn't think about the 'law' side of things. Although I wonder if it is any different than say coffee shops who charge extra for CC purchases less than say $3. 3.5% is kinda steep, the normal rate from this company is 2.75% for all swiped transactions. Don't want to turn this into an ad for them, but with no recurring fees of any sort it is darn handy to have on the rare occasion I have to use a credit card directly from a customer.

Matthew Saville

Simply put, nobody likes to be nickle-and-dime'd... My recommendation would be, just tack on an extra 3.5% to all your prices and call it a day. If clients won't pay you an extra 3.5%, there are bigger problems at hand lol. And besides, you always have the option of saying "there's a 3.5% cash / check discount" if you think they're on the fence.

Just food for thought!

=Matt=

bike21

I actually really like that idea Matt, a discount for non credit card usage. I already give 3% of my client's investment to a non-profit of their choice, so upping my prices a bit and offering a discount for checks or cash sounds pretty good.

kitkos

By “Square” you are referring to the iPhone & Andriod Squareup card swipe tool & app?

Square’s base rate is 2.75% but since you were doing a hand-key (card not present) transaction you are charged a higher fee. This is due to the higher risk that this could be a stolen account number and thus the issuing company may never get paid back for the transaction. It is normal operating procedure in the CC business.

The biggest question about your CC business is, do you need the portability of Square? If you are taking CC orders from your office or even home for that matter you don’t need the convenience of Square you can find other companies that would charge a lower rate. The higher volume you do the lower the rate you can negotiate but with your low volume you still might be able to find something lower than 2.75%
Check with the bank you do business with. They have a Merchant Service department that can set you up with the equipment (free) and most likely a lower rate.
If you need the portabitily of Square on rare occasions, you could still use it when the need arises.

Most States have laws against charging one rate for cash and one for CC but they vary, you would need to look into that locally. Since you are talking a few pennies on the dollar I would either eat it or raise your rates for everyone no matter what tender type they use.