# Charging Your Credit Card Merchant Fee to Customers



## fdsales (Jul 1, 2007)

For those that accept credit cards as a form of payment, a very recent class action lawsuit against credit card companies prompted a partial compromise from credit card companies that will now allow merchants to be able to charge part or all of their merchant fees (capped at a certain limit based on whether it's a credit or debit card) to customers that pay with credit cards. In the past, merchants were able to add a fee, but had to either just pack it into another charge, like shipping, or label it as a "service charge", but now, it can be listed on the invoice up front. For us, that's almost 4% of each credit card transaction. 
Is that a good idea to make customers pay an additional fee for the privilege & convenience of paying by credit card? I think each merchant has to decide on their own. For us, the walk in and pay in advance customers, no. But we have been finding that lately some of our net 30 customers will use a credit card to pay after the 30 days have passed. So now on the bottom of all of our net 30 invoices is this memo: THIS INVOICE SUBJECT TO A ADDITIONAL FEE OF 4% ADDED TO THE INVOICE TOTAL IF A CREDIT CARD IS USED FOR PAYMENT PAST 10 DAYS FROM DATE OF THIS INVOICE.
Sounds rude, but if the customer wants to use a credit card for payment, they can, without fee, do so as long as it falls within the 10 day "grace" period.
Any feedback????


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## Preston (Mar 21, 2006)

Just be aware that there are quite few states that have laws not allowing this even if the credit card companies do now.


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## shannchica1234 (Feb 3, 2010)

I don't find it to be rude but unfortunately some people do. Most people don't realize that businesses even get charged for the use of credit cards and those that do don't seem to care as long as it is not passed onto them. I think it is time that people realize that we are getting charged left and right for using our own money. We are a country that is in trouble because of our spending habits and we need to change. I have decided to either start charging an extra fee or I will start charging more for my services. I have let my company suffer enough while the rich get richer and I am done. Good luck to you.


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## NeonTees (Apr 25, 2010)

The cost of processing the cards is part of overhead and should be factored in when setting prices. Same as electricity, rent, insurance etc. 

Net 30 is loaning someone merchandise/money so they can convert the goods or resell them to have money to pay for the supplier. There is a cost associated with that as is ties up your cash flow waiting to be paid. Based on that, our net 30 accounts must pay with check. 

For immediate cash, the credit card fee is part of it. For net accounts, an additional credit card fee is a cost that is above and beyond. 

The surcharge would probably be a turnoff to most consumers. In the case of a net account wanting to use it at the end of the term is a great place to add it on. 


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## binki (Jul 16, 2006)

The charge is illegal in 10 states. You can add it of you want or give a cash discount for those that don't pay by CC. 

Aside from that 4% is really high. I would call your merchant processor and get some of those fees reduced or eliminated. Right now we don't pay statement fees, closing fees and per transaction fees. We do pay the % per charge and there are some other % transaction fees depending on the type of transaction. It all washes out to about 2.1% for everything at the end of the month.


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## littlefatbuddy (Oct 8, 2012)

I agree with binki on this one. Set your prices with the additional cost figured in and offer a cash discount. I prefer this type of pricing when I go in a business. I would think some of your customers would complain they did not see the "fine print" no matter how large it is. I see it as a choice they make if they pay later, but I would personally prefer to be offered the choice to "save" upfront. I also do not think there is anything wrong with a fee for net 30 accounts that go past due. Every financial institution of any type has late fees, I do not know why retailers can not. A quick question, is the 4% after 40 days? or is 10 days from the due date on the invoice or 10 days from the time you mailed it? Not being familiar with your company, the statement was just a little confusing to me. If it is a net 30 and they are late could you not call that fee anything you want? Late fee, finance charge, courtesy fee, I am not a credit organization and still financed you for free for 30 days fee?


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## NinjaTactics (Mar 6, 2011)

Why not just build about a flat 3% into your fees? That way the customer doesn't see an itemized charge per se, and the cost differential will probably be close to negligible.


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## Dante2004 (Aug 23, 2010)

We go the other way and offer a cash discount. Even if I recoup the 4% (or whatever the actual total is) I'd rather just have cash. You take on additional burdens when accepting credit cards beyond just the transaction fee. The card could be stolen, the customer could dispute the charge down the road, you have additional equipment (credit card processing) that you must purchase/maintain. There is a security liability that you inherit also. Let's say someone's card number gets "stolen" and they swear they only used it at your shop...now what? Plus, depending on your service, you don't have access to the funds (cash) right away...days in some cases. Especially if you use Paypal because you have to manually transfer the money to your checking account.


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## Printavo (Oct 7, 2007)

I would personally either eat that cost or throw into another fee. The less fees the customer sees the happier they are.


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