Paying with credit or debit cards is, no doubt, more convenient than paying with cash. If you run an ecommerce business, card payments are about the only means your customers can pay for your products or services. Unfortunately, only one party bears the burden of the convenience- you. Depending on your merchant services provider, you may have to give up as much as 3% of every transaction in the form of payment processing fees. Subscribing for a surcharge program changes this narrative as your customers will now pay for their convenience.
What is a surcharge?
A surcharge or checkout fee is the additional fee that a merchant or payment processor adds to the stated purchase price to cover credit card processing. Although surcharge programs may differ from processor to processor, the basic concept remains the same. Deducting money from the customer's account significantly reduces card processing fees. This could be especially beneficial for businesses operating in low-margin sectors.
What can I surcharge?
The law only allows businesses to surcharge credit transactions in the United States and its territories. You cannot surcharge customers that use a debit or prepaid card.
Are surcharge programs legal?
Currently, surcharge programs are legal in 42 out of 50 states in the country. If you're operating in any of these states, you can legally surcharge your customers by following all the requirements set by their credit card networks. However, you cannot subscribe to a surcharge program if you operate in any of these states:
- New York
Is there a cap on how much I can surcharge?
Businesses are not allowed to surcharge more than 4% or the merchant's actual cost of acceptance, whichever is lower. Generally, most surcharge programs, including ours at Merchant Focus, do not charge more than 3% for most businesses.
Should I let my customers know that they will be surcharged?
Yes. The requirements set by credit card networks usually mandates letting customers know that they will be surcharged. Even if the law does not require you to do so, it's the right thing to do. You'll be betraying your client's trust by deducting money from their account without pre-informing them.
When you subscribe to Merchant Focus' surcharge program, we will give you a terminal that displays the surcharge on the receipt. Our company also provides signage that you can display at your business location. That way, you will have done your best to inform your customers about the surcharge.
How do I handle refunds and chargebacks with a surcharge?
In the event of a chargeback or refund, our company will return the purchase amount and the cardholder's surcharge. That way, you can rest assured you won't be facing surcharge complaints from dissatisfied customers.
Contact the leading merchant services provider
If you've been searching for the best merchant services provider for your business, you need not look beyond Merchant Focus. We are a preferred Authorize.Net reseller, and alongside our partners, we guarantee safe and secure online payment processing. We also provide a free surcharge compliant terminal to all the clients that subscribe to our surcharge program. Contact us on 800-895-4085 or visit our website to learn more.