credit card charge / fee when buying? - Mothering Forums
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#1 of 15 Old 09-07-2006, 12:24 PM - Thread Starter
 
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hi, this is slightly OT, but i would like to know whether it is customary for a small home based business to charge 5% of the total fee for credit card charge?

thanks!

ania
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#2 of 15 Old 09-07-2006, 01:20 PM
 
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No. In addition, I think MC and Visa prohibit merchants from charging a cc use surcharge to their customers. I also know that if you are accepting cc through paypal it is against their user agreement to charge consumers a use fee.
Personally it is also a turn off to me as a consumer. If your cc transaction fee really makes a dent in your profit you need to raise your prices and/or account for the fee in the price of your product.

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#3 of 15 Old 09-07-2006, 01:23 PM
 
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You can't charge a fee for CC use but you can give a discount for use of other types of payment.

Mom to Joscelyne 14, Andrew 12, and Mackenzie 10 and wife to Nate.
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#4 of 15 Old 09-07-2006, 01:57 PM
 
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not customary enough for me to have heard of it

OK, well people try to pass along paypal fees on ebay sometimes, but it's against the rules and will get you shut down. but that's the closest I've heard to what you describe.

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#5 of 15 Old 09-07-2006, 02:26 PM
 
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Quote:
Originally Posted by annabanana
hi, this is slightly OT, but i would like to know whether it is customary for a small home based business to charge 5% of the total fee for credit card charge?

thanks!

ania
no. furthermore, it's illegal and prohibited by credit card processing regulations set by all major credit cards. my husband used to sell CC processing so if you have any other questions i can probably forward them to him!
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#6 of 15 Old 09-07-2006, 02:46 PM - Thread Starter
 
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thank you!

unfortunately i don't have a choice with the merchant. we just moved to the arctic, and are catching our last sealift of the season. the lady is from ishop4u.ca, she shops at costco for residents of the far north, packs, and sends it off to the boat. it is cheaper for us to order via sealift, then to buy locally, or than to order from regular 'food mail'. because the prices at costco are so much better.

so i ordered about $900 worth of food, and plus her fees, and transportation to montreal etc, and i will end up with paying close to $80 for the cc fee, and we are really on a tight budget.

she does accept cash or email transfer, but i don't have as much cash. she also didn't respond yet whether she would accept a personal check, if i mail it to her. i might be able to pay some iwth the check, and some with the credit card.

today is the last day for the order, and i don't even know if there are other businesses that ship to us in the same way.

she has that 5% fee on her agreement. so if it is illegal, what can i do? i do need my order, though!

mama bee, any ideas??

thank you so much!!!

EDIT
so she called us from costco, so she has finished our order. what do you think, should i mention this to her, that it is illegal? what if she does not ship to us? but on the other hand, it is not like she will keep that much of stuff, and refuse to ship altogether.

what should i do?

ania
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#7 of 15 Old 09-07-2006, 03:22 PM
 
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by "in her agreement" do you mean the agreement she has with her customers? i read over that a few times but i'm not sure what you mean. if so, does it say explicitly that she's charging the fee to offset CC processing charges? if it doesn't, she could easily just say it's to offset her other associated fees and avoid trouble that way. i hope that's not the case.

i'd tell her politely that while you understand her need to retain a profit off her sale, she could get in a lot of trouble and lose her merchant account with the CC companies if they find out she is charging an add'l amount to cover her fees. even worse, it can be a criminal offense to charge non-authorized amounts whilst giving the impression that, for example, visa or mastercard is allowing her to charge them.

as far as your order goes, i don't know. i'd hope that maybe clueing her in would be enough for her to drop the fee altogether but since i don't know her or how much she really values obeying the regulations she's bound to in her contract with the CC companies, i can't say for sure whether or not that would sway her. good luck!
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#8 of 15 Old 09-07-2006, 03:39 PM - Thread Starter
 
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yes, she emailed me her contract, and it says:

Payment for Order: Cash ( ) Email Transfer ( ) Visa/MasterCard (5% charge) ( )

then i emailed and asked about it, and she responded: "If you choose to pay by visa there is a 5% charge for this as Visa takes a fee off the total bill for their service and we have to recoup their charge off your purchases."

Quote:
Originally Posted by mama_bee
i'd tell her politely that while you understand her need to retain a profit off her sale, she could get in a lot of trouble and lose her merchant account with the CC companies if they find out she is charging an add'l amount to cover her fees. even worse, it can be a criminal offense to charge non-authorized amounts whilst giving the impression that, for example, visa or mastercard is allowing her to charge them.
where can i find this?

thanks so much for your help.

ania
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#9 of 15 Old 09-07-2006, 05:08 PM
 
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I had heard this is illegal, as well, but I know of a number of places that do it. For example, dd's school says if you pay the tuition by credit card, to add 3%. That I can understand, but I feel like if a business is going to accept credit cards, then the fees associated with accepting them should be built into your pricing structure and if someone chooses to pay by check or cash, you can give them a discount.
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#10 of 15 Old 09-08-2006, 02:04 AM
 
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Quote:
Originally Posted by annabanana
where can i find this?

thanks so much for your help.

ania
according to DH, your best bet would be to contact the CC companies directly and ask for a written copy of their policies surrounding surcharges by merchants to cover fees. their wording may differ depending on type of merchant account but they ALL take this very seriously and would be interested in knowing who is breaking their regulations. i hope you get it sorted out! best of luck.
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#11 of 15 Old 09-08-2006, 08:32 AM - Thread Starter
 
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Quote:
Originally Posted by mama_bee
according to DH, your best bet would be to contact the CC companies directly and ask for a written copy of their policies surrounding surcharges by merchants to cover fees. their wording may differ depending on type of merchant account but they ALL take this very seriously and would be interested in knowing who is breaking their regulations. i hope you get it sorted out! best of luck.
thanks!

for now i emailed her yesterday, after she told me she purchased my order, saying i wasn't comfortable paying the charge, and the told her that according to my research that was illegal. i did what you suggested, nicely.

of course now it occurs to me that she gave me only estimates for packing, so she might as well charge me $100 more for this

but in any case, she didn't respond yet. maybe today dh will talk to her.

thanks for all your help!!

ania
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#12 of 15 Old 09-08-2006, 08:33 AM
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Is this for goods or a service?
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#13 of 15 Old 09-08-2006, 08:35 AM
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Oooops! I see that it's for goods.

I asked because a daycare provider that I once used had paypal for emergency situations, and using it allowed clients to avoid a late fee when they couldn't get to her house to pay her on time. In that situation, I thought her passing on the paypal charges was appropriate.

I'd have rather paid those charges than a $25.00 late fee.
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#14 of 15 Old 09-08-2006, 11:31 AM - Thread Starter
 
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so she said she is re-contacting her credit card provider. she said that when she established the account the cc gave her a go ahead to charge, as she was not charging extra for the groceries that she buys. well yes, but she does charge an hourly rate for shopping, and then a set rate for packaging.

so for now she says she won't accept credit card payment. we can deposit cash in her account. the problem is i don't have that much cash. but i think if we have a credit card cash withdrawal, and then pay by the end of the month, we are better of. i hope we can pay by the end of the month, though. ugh.

thanks for the help, everybody.

ania
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#15 of 15 Old 09-08-2006, 06:02 PM
 
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Noticing now that you are in Canada and that the merchant is also. This might make a difference b/c I do know that in the U.K. it is legal to charge a usary fee though I don't know how common it is. this may be similar under Canadian law too.

Kathy

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