Attn Biz Owners: It has been brought to my attention that there are credit card processing reps running around out there telling business owners that they can get rid of their fees completely. Trust me, nothing is free and this is a PLOY to get you to sign. Sort of Legit but Not Legit. Let me explain, and I apologize in advance if some does not make sense. I heard about it and felt it necessary to get this information out as quickly as possible. So it may be somewhat unorganized.
1) In order to have no fees what these companies do is have you charge a surcharge of your fees to the customer (and this is ok if done properly). So your effective rate is now being charged to the customer. This is not getting rid of your percentage rate because you pay a % REGARDLESS of what your clients pay. So Yes, you are getting some back from your clients but you are still paying your rate on the surcharge you are charging. Complicated.
2) If you are a business that accepts debit cards or prepaid cards, YOU CANNOT CHARGE A SURCHARGE ON THOSE!!!! It is not legal for you to charge a surcharge on debit or prepaid cards PERIOD! So you will not benefit from a surcharge if the majority of your cards are debit.
3) Adding a surcharge is not as simple as telling your customers they have an extra fee. NO, you MUST register and apply for surcharge permission through VISA, MASTERCARD, DISCOVER, & AMEX. This is a 30 DAY PROCESS and you could be denied.
4) Your state must allow you to charge surcharges on credit cards. Some do not.
5) If you are approved for surcharging your receipts MUST show the surcharge and be properly identified!!
6) All doors and pay counters must have the surcharge posted and visible to the customers before they enter the facility and at the time of payment.
7) You can NOT charge over 4% on ANY type of card.
So, If you get one of these reps in that are promising the world and you want to listen because you are sick of the credit card processing game, don’t get yourself in trouble! If it is to good to be true it is. Most RETAIL businesses will not benefit from surcharging significantly because of high debit card use. Most of all…talk to a local rep that cares about their local businesses. They can advise you properly regarding regulations, laws, compliance etc.
If any of you have questions regarding this, I would be happy to answer them if I can or at least get you to the proper and accurate resource.