We hear about this all too often: A company that sells high-ticket goods and services accepts a credit card as a
form of payment. However, at the time of sale, it
adds a 2. 5 percent surcharge to cover their bank
card processing fees for sales exceeding $500.
In doing so, this business has violated several
credit card rules involving “convenience fees.”
As processing representatives, we find that
our customers—both inside and outside the petro-
leum equipment industry—have lots of questions
about what they can and can’t do when accepting
credit cards. And with good reason. The rules are
sometimes confusing, and the maze merchants
must navigate becomes even more clouded by the
differences in how each card brand approaches
this subject. Moreover, the bigger the ticket, the
bigger the questions and the bigger the risks.
Just as there are “dos and don’ts” for almost
everything these days, adding fees to card transactions has its own set of rules and consequences.
Yes, you can add convenience fees to card transactions. However, you have to make sure you are
doing it the right way.
Let’s start off with three important caveats.
First, the rules for the various card brands are
not alike. So, it’s important to understand what
each card issuer you use requires and allows.
Second, always seek advice from your processor
before entering these waters. Call your processing
representative before you begin to establish your
policy for adding a fee. Processing companies have
compliance departments that offer assistance for
these situations. Finally, card brand rules can and
do evolve over time. What we see today very well
could change in the near or long term. Even the
summary in this article is a mere snapshot of the
rules as of the time we are writing (March 2011).
So any convenience fee program should include
regularly revisiting the brand rules with your
processor to address any changes that may have
With those caveats, here are eight guideposts
you can use—today—in crafting your convenience
One: Playing Percentages Creates