With the continuing drive to cashless shopping and card based purchasing many customers today have no idea that the price of the products they purchase must by default embody the cost of payment processing for the act of purchasing the product with the credit card cards as well!
In all the markets, cost competitiveness and price continue to make the difference between purchasing and “going elsewhere”. With all the pressures on your margins are there any alternatives?
More and more consumers are being given an option as the purchase with sellers applying extra fees for using a credit card when making purchases in person or online. A common example these days is at the gas station “cash” versus “credit” charges or online when you see the notice of a “processing fee will be added.”. The net effect of this? To help ensure that you as the vendor are seen in the most competitive pricing position possible and the additional cost is the credit card owner’s individual responsibility!
Generally known as a “SURCHARGE”, it separates the credit card transaction cost from the products and prices you charge your customers. A surcharge is applied as a percentage of total price of the purchase. Rules abound across states and card brands that may affect if and the amounts that can be charged. It is not a one size fits all kind of service charge.
Can I charge a Fee for credit card payments?
The short answer is “maybe”! Businesses can charge extra fees, but it’s not a free-for-all. Rules vary by fee program, card brand, industry segment, payment acceptance channels, and state. At (HMS) Herman Merchant Services, we are here to help guide the way. To get started we work with you and your Merchant Provider to help you understand the pros and cons of fee programs, as well as the rules and regulations required to comply with each in your industry and state.
Typically, the amount charged is set to a maximum of 3% of the total purchase transaction and is applicable to those transactions paid with a credit card. Transactions paid by cash, check debit (“ACH”) or prepaid card or check are exempt from the surcharge fees.
Here at HMS our goal is to help your organization be successful in using and leveraging merchant processing methods and practices. From working with you to reduce or even eliminate the many “grey areas” of your operating expenses because of using credit card services, to making sure you can take full advantage of the many services available to you from the Provider organization you contract with.
Let us help you to give the most value to your customers and get the most benefit from your merchant service provider services today. Click here to contact us!
