Can I Charge a Convenience Fee for Credit Cards
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How to Make Your Customers Pay for Credit Card Fees
Convenience fees are charges nerveless for the privilege of paying for a product or service with an culling payment method that is not standard for the merchant.The types of payments where a payee typically charges convenience fees include mortgage payments, holding tax payments, college tuition and taxes.
Merchants are allowed to accuse customers a convenience fee for using a credit card if the client is using an alternative payment aqueduct. For example, if a company usually accepts payments in person, a convenience fee might be added if their client uses a telephone or order online.
No matter how transactions take place, the practice of ever charging customers a fee for credit bill of fare payments is called surcharge.
This article also includes information about:
Convenience Fees vs. Credit Bill of fare Surcharges
How to Calculate Credit Card Convenience Fee?
Are Convenience Fees Legal?
Convenience Fees vs. Credit Card Surcharges
You may be charged a convenience fee when you use a credit bill of fare simply that'due south not the aforementioned as credit card surcharges. Each credit card brand has its own guidelines for convenience fees.
Surcharges are the fees that comprehend the cost of a card transaction. While convenience fees are charged for payment methods that a merchant doesn't normally accept. For example, a company might charge a convenience fee when yous pay over the phone instead of online.
How to Calculate Credit Card Convenience Fee?
Convenience fees can exist a fixed dollar corporeality or a percentage of the transaction amount (ordinarily two to 3 percent) and must exist disclosed to the client in advance.
Ways to charge credit card fees to your customers:
- Add a line item for credit card surcharge to the invoice and add a standard corporeality to each invoice.
- Summate to outset the ii.9% + $0.thirty charge per invoice.
How to calculate a convenience fee:
If you want to earn $100 from a credit menu payment, work astern from that corporeality, which is y:
x = (y + .3) / .971
x = (100 + .3) / .971
x = ~103.30
To receive $100.00 from this credit card payment, you need to add a convenience fee of $three.30. In certain cases, you lot'll need to double bank check the total for a missing $0.01 rounding error.
There are also online sources available to aid yous calculate a credit card convenience fee.
Are Convenience Fees Legal?
In most states, convenience fees and surcharges are legal under a certain per centum of the purchase toll. In that location are currently 10 states where convenience fees and surcharges are prohibited—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas and Puerto Rico. If a customer is illegally charged a convenience fee or surcharge in these states, they can study the retailer to the land attorney'due south general office.
Surcharges over 4% are illegal everywhere. Too, a convenience fee or surcharge is illegal if the payee has not alerted you of the fee ahead of payment. In that location must exist a sign displayed exterior in the store or online stating a surcharge exists for credit menu purchases and a notification of the amount of the fee at the point of auction.
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Source: https://www.freshbooks.com/hub/payments/make-customers-pay-credit-card-fees
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