This article was created to answer questions about credit card surcharges for our customers with and without CardPointe Integration for Smart Service and iFleet. Here we’ll discuss some information about surcharges, including our stance on surcharging customers and some important notes on surcharges from MasterCard and Visa.
What's a Surcharge?
When a merchant (your business) takes payment via credit card, that merchant may choose to add a fee to the invoice in order to cover the merchant’s cost for processing the transaction. This might take the form of a flat fee or a percentage of the invoice total.
Some states and United States Territories have prohibited merchants from charging a surcharge such as this, and some credit card networks have specific rules detailing the maximum amount a customer can be charged by a merchant for a given transaction. The type of card used by the customer may also have varying rules on whether or not a credit card surcharge can be imposed by the merchant.
We encourage you to learn more about credit card surcharges by checking state and local laws regarding the use, presentation, and conditions of imposing a credit card surcharge on your customers. We at Smart Service would also like to provide the following FAQs from Visa and MasterCard regarding their stance on credit card surcharges.
Visa’s FAQ on credit card surcharges (USA)
MasterCard’s FAQ on credit card surcharges (USA)
Visa, MasterCard, and American Express FAQ for Canada
Will Smart Service Assist With Implementing Credit Card Surcharges?
Smart Service and iFleet are sold and used in the United States, U.S. territories, and Canada. We have partnered with CardPointe to provide our customers with an integrated merchant service to receive payments via credit card, ACH, check, and more.
We at Smart Service have carefully considered the requests from some of our customers to implement such a feature and we thank you for your feedback! Coming up with a suitable solution for merchants wishing to impose a credit card surcharge while satisfying our current obligations and restrictions has been a long-debated topic for our team.
With the wide variety of laws in our coverage area, our partnership with CardPointe, and the regulations depending on the various types of cards issued, we are not able to create a feature to assist with credit card surcharges at this time.
What Are My Options?
After reviewing the laws and industry regulations for your area and business we would recommend that merchants looking to impose a credit card surcharge on their customers pursue the following options when it comes to taking credit card payments with Smart Service and iFleet.
Build Processing Costs Into Pricing
Consider raising prices to offset the cost of your business taking payment via credit card. You may wish to investigate how other businesses in your area have increased their pricing to accommodate credit card processing fees.
Implement a Minimum Purchase Requirement
Revise your terms and conditions to implement a minimum purchase requirement for customers wishing to pay via credit card. This is another common strategy small businesses implement to avoid credit card processing fees on smaller purchases.
Cash Discount Programs
A business might also consider offering a cash discount for invoices of a certain dollar value to encourage your customer to cover the transaction with cash rather than by credit card.
"Other Charge" Items for QuickBooks Desktop
If your company is allowed to add surcharges in qualifying circumstances, you might consider using the “Other Charge” type item from QuickBooks Desktop. This item can charge a percentage of the invoice total and should be added as the last item on the work order.
We recommend that you investigate your local laws and review industry regulations when choosing when to, and not to implement a credit charge surcharge. We also recommend that you speak with your accountant regarding the best course of action when it comes to implementing the feature detailed above for your business.
Surcharge Function for QuickBooks Online
Since there are no “Other Charge” type items or equivalent in QuickBooks Online, Smart Service has developed the following solution for adding surcharges on a per-item basis. If you click the +! in jobs items and choose the surcharge option, you can choose an item from your item list and enter the surcharge amount at the bottom left corner. This amount will be based on the item total and will be included in the item price once the item has been added to the work order.
We recommend that you investigate your local laws and review industry regulations when choosing when to, and not to implement a credit charge surcharge. We also recommend that you speak with your accountant regarding the best course of action when it comes to implementing the feature detailed above for your business.