Do you do business with companies that tack on credit card processing fees?

chuckw951 · 10-31-2005, 08:35 AM

I find myself buying more and more things over the internet (not just Porsche parts).

I've found a number of sites that want to charge 2-4% "processing fee" for credit card payments.

Are merchants allowed do this? Seems like the credit card companies would prohibit this type of policy via their user agreements...

For the most part I refuse to do business with companies that don't accept credit cards or charge a fee.

Any opinions on this?

legion · 10-31-2005, 08:40 AM

I do think that Mastercard and Visa specifically prohibit this. I can kinda understand why, but isn't the fee actually charged by a CC company to a merchant 1%? They are doubling to quadrupling the fee.

If taking a CC is such a hassle that a business feels they need to be compensated so much for it, why bother taking CCs in the first place?

kumma · 10-31-2005, 08:52 AM

Quote:

Originally posted by legion
I do think that Mastercard and Visa specifically prohibit this. I can kinda understand why, but isn't the fee actually charged by a CC company to a merchant 1%? They are doubling to quadrupling the fee.

If taking a CC is such a hassle that a business feels they need to be compensated so much for it, why bother taking CCs in the first place?

Fees vary based on volume of charges and from different companies, Visa, MC Amex all have different fees as well as reward cards have different structures as well. Small companies like mine fees can reach 5% along with statement and per item fees. The benefit is quick payment and not waiting for checks to be mailed.

As far as prohibiting extra charges for credit cards thats why its always listed as a "cash discount" lost if credit card is used.

For the most part I dont charge extra for credit cards, but if some one keeps hammering me on price and then pays with a credit card I will charge extra or let the customer walk. Dont feel sorry for credit card companies they get there money from both ends.

jorian · 10-31-2005, 09:15 AM

A business I own is charged 4.5% to accept a credit card. When we started the fee was 1.95%. I am considering adding a processing charge as well. I don't like it either but my alternative is no charge cards which would be foolish.

jorian · 09:19 AM

BTW I was charged 8% by a competing company before I quit offering their card.

In an increasingly 'cashless' society, not accepting CC will eventually put you out of business.

cashflyer · 09:30 AM

Quote:

Originally posted by legion
I do think that Mastercard and Visa specifically prohibit this. I can kinda understand why, but isn't the fee actually charged by a CC company to a merchant 1%? They are doubling to quadrupling the fee. ....

I run a small business (ya don't get much smaller). I accept Visa, MC, and Discover. My ACH charges me from 1.9% up to 3.1% depending upon two factors:
(1) Monthly CC sales volume
(b) whether a card is swiped or keyed

I'm not sure if the individual sale amount has any effect on the rate. I know the factors above DO.

I never charge a CC handling fee. My price is my price, period. CC fees are part of doing business, and I take that into account when I set up my pricing on any item.

And as for not taking CCs... I would have to shut my doors the same day I decided to stop accepting them. 100% of my customers pay with CC - no checks, no cash.

RallyJon · 10-31-2005, 10:14 AM

MC/Visa are getting too piggy. Did you know that they now charge merchants an extra charge if you use a "rewards" card? So when a merchant accepts your card, he doesn't know if he'll be upcharged so you can get your frequent flier miles.

My company is strictly b-to-b, but if we were selling to consumers on a thin margin, you better believe we'd have to find a way to get that extra 1% back.