Hi guys. It's been a while. Have been slammed lately. Hope all's well. I am having more and more clients asking me about credit card processing and I signed up for Square. I was wondering if I should eat the fees associated with credit card processing (around 3%) or let the client know ahead of time that there will be a % charged additionally?
Those that accept credit cards, what do you guys do?
I've always been told that is (if not illegal) at least against the CC company's rules to pass along the fee to the customer. Some get around it by offering a discount for cash payments.
I don't see how it's illegal because when I pay bills to certain companies, or paying my wife's college tuition, they have something that ways "a X.X% processing fee will be charged if paid by credit card)
MBMK wrote:
I don't see how it's illegal because when I pay bills to certain companies, or paying my wife's college tuition, they have something that ways "a X.X% processing fee will be charged if paid by credit card)
The rules are different for institutions vs. individuals (because the former write the laws).
MBMK wrote:
I don't see how it's illegal because when I pay bills to certain companies, or paying my wife's college tuition, they have something that ways "a X.X% processing fee will be charged if paid by credit card)
Those are "convenience" fees and city and state governments are notorious for imposing them.
I think in order to do that you have to list a Credit Card Price and a Cash/Check price. At least that is how the law works and how different companies (i.e.. gas stations, etc) get around it in Connecticut.
Depending on your volume, pricing, etc. another option might be Pictage w/ ShootQ. That is $99/month but the CC Processing is built in at 1.5%. (but that $99 includes online galleries that clients can order prints from, album design, etc)
I currently use Square as well but for me it makes sense as most of my clients pay with check. Although I take care of my clients well my biggest worry with CCs is that they will dispute it after the fact or if the wedding is called off. I don't advertise that I take CCs within pricing, meetings, etc.
In my opinion, if you are "taking the hit" then you are pricing your services incorrectly.
When I determine the prices I charge my customers, I figure out what I want to make and then add any possible expenses, taxes, fees, etc...
I could never imagine telling a customer a wedding collection is $4,000, or $4,150 if they want to pay by credit card, that seems absurd. I would charge $4150 in that case, and consider it a bonus if they happened to pay by check.
I don't think it's illegal.........simply against the credit card processors rules.
You'll end up looking cheap and tacky if you try to get your clients to pay the extra fees and it'll also piss some people off.
I remember how pissed I was when I had to pay extra when paying my yearly car taxes or whatever. Government usually will charge extra if you pay for something with a card.
Just incorporate it into your overall price. No need to go into details with a client. If they ask if they get a discount if they pay in cash, well, that's up to you. "Sure, I'll cover the taxes as my gift to you". You still come out ahead if you have priced correctly.
I've heard it's illegal to says "minimum credit card purchase of $XX"...etc....you know when you go into that shade gas station with the dirty magazines, and they wanna charge you $10 for a $1.50 drink.....i've heard THAT is illegal...
marti.g3 wrote:
Just incorporate it into your overall price. No need to go into details with a client. If they ask if they get a discount if they pay in cash, well, that's up to you. "Sure, I'll cover the taxes as my gift to you". You still come out ahead if you have priced correctly.
I agree. I mostly accept payments by direct transfer, but there are a few smaller items that are more convenient to pay with online, which involves a processing charge. Its easy incorporate this into the price, like you would for any other cost. If you see more and more people using this method, just increase your prices by 3%, it's not huge, should be straight forward?
+1 to Matt B, essentially what I was trying to say there.
It's a cost of doing business. However there have been new regulations and the rules might be changing. It will only be acceptable for me until all of the other companies start charging a surcharge fee.
