Can I charge a customer a merchant service credit card fee on top of their invoice?

Question

Our customers rarely use credit cards as a form of payment. It's usually a check via mail. But a few do use a Visa or MasterCard once in a blue moon. We are charged 2.75% from our bank for the the total of the credit card purchase. At the time of the credit card transaction can I add the standard percentage on top of the invoice amount? Am I legally allowed to do so? Also, am I legally allowed to markup the 2.75% we are charged on our merchant statement?

Answer 1

Absolutely not. Merchants must fund all card costs (setup, processing, discounts, and other fees) from their own budgets. Accepting cards for purchases is costly, as there are multiple fees involved. The business must either be able to build the cost of card acceptance into their product and service prices, or support these costs directly from their own budgeted resources.

There is no federal regulation that prohibits this as the law that prohibited a surcharge on credit card purchases expired back in 1984. However, both Visa and MasterCard allow a merchant to offer a discount to customers who pay by cash or check, but in most cases they say a merchant cannot charge more for putting it on plastic or that would be a VIOLATION OF THE MERCHANT AGREEMENT.

All card associations require that merchants accept card payments at par value, without giving preference to other methods of payment such as checks. That is, a merchant may not impose a surcharge on the purchaser when they pay by card. The only discount that may be given is for payment by cash, which should be carefully considered before being implemented in light of fairness, operational, security, and internal control issues.

Merchants must adhere to minimum acceptable business practices. In addition to the rules imposed by the card associations there are other prudent business practices that must be set up and followed by each card-accepting department / unit. Internet card acceptance has its own additional requirements. There are additional requirements mandated whenever a merchant wishes to accept card payments through its Web site. This is because of the different nature of the online medium – the speed, volume, and electronic character of these transactions require much stricter attention to security and fraud than is customary for in-person payments.

Answer 2

Used to be a federal regulation that you could not charge more to a customer who uses a credit card. You could give a cash discount to cash customer but not charge more to the credit card user. This reg has expired. However Visa/Mastercharge have terms in your card agreement that prohibit the additional cost/surcharge just for using the card. Think about giving the cash discount to your customers instead. While it's doubtful someone will go to trouble to complain to VISA, you might avoid the problem in future.

Answer 3

Sorry, but you are not allowed to do so. best thing is to raise all prices by three percent, that way you cover the cost of your CC transactions and get that and then some back on cash sales.

i tried this and found it to be illegal. even when you see those signs...minimun cc transaction 10$ that is a no no too.

Answer 4

I have found a charge of $1.00 for "use of automatic gas dispensing" equipment.
It has been at Kum and Go in Springfield, MO. Even when I asked before pumping,
I am told "we don't do that". Not sure if ALL their stations do that.
I am working on checking it out.

Answer 5

Waiting on more answers before I share my view

Answer 6

Informative topic, just what I was searching for.

Answer 7

Was about to post this question too this afternoon