Let’s take a look at 7 important things to keep in mind when considering a merchant account surcharging program at your business.
There’s pros and cons so you have to ask yourself: Should you surcharge? Or should you not?
So to start just know that surcharging is the process of adding a percentage fee on TOP of a credit card purchase
There is a compliance process that you need to follow in order to surcharge properly. You cannot just start adding fees to your invoices and surcharge
1) Certain states simply don’t allow it. At the time of this video there are still about 2 states that do NOT allow surcharging programs. Massachusetts and Connecticut
2) You have to have proper signage and public notifications on invoices and in retail storefronts, if there is going to be a surcharge assessed. There needs to be at least 1 sign or method to make the customer aware of the surcharge, but it’s recommended to have 2 or 3 as well as a verbal confirmation at the point of sale.
3) You cannot surcharge a debit card purchase (and this also includes prepaid cards). Meaning it’s simply NOT allowed. So you can only surcharge a purchase if you’ve followed all the other rules and setup regulations AND the customer is paying you with a credit card.
4) There IS a difference between a surcharging program and a cash discount or convenience fee program. I have another video on my channel that’s linked up for you. Learn the details by clicking here.
5) You cannot profit from it – 4% max – You can’t surcharge greater than the cost of your processing fees. For most credit card brands, surcharge fees cannot exceed 4 percent. YOU MUST Line item the surcharge on the receipt
6) Software AND hardware determines how you surcharge. So not every single company will have the ability to offer a surcharge program. Some CRMs for example may offer an invoicing solution, but NOT give you the ability to add a line item for surcharging.
7) Proper registration with the VISA/MC and card associations is REQUIRED, 30 days prior to the implementation of a surcharging program, so you need to plan ahead. The registration is posted right on Visa and Mastercards respective websites and the corresponding links are in the description.
If you want to know about that merchant account surcharge registration process for visa Mastercard that I mentioned, me and my team can help you with that. Book a call.
So if you learned something new today please consider giving this video a thumbs up and sharing it with a friend…. That’s always appreciated.
Once again, there’s links to all the other videos on Surcharging and cash discounting in the description area of this video (over on YouTube) so be sure to click the links to continue your research on these topics.
If you want to talk specifically about the needs of your business or the needs of your client’s businesses, be sure to check the appointment links to schedule with myself or one of my team members.
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