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Education

A contemporary A surcharge, also known as a convenience or checkout fee,

is an additional fee merchants may charge customers to
guide to compliant cover the cost of credit card processing fees. For example,
if a customer pays for a purchase with a credit card, the
merchant may add a surcharge of up to 4 percent of the sale
surcharging to help cover the cost of the transaction fee charged by the
credit card company.

By Nicholas Cucci What are the advantages
Fluid Pay of surcharging?

ith merchant credit card There are three main merchant advantages to adding a sur-
fees reaching as high as charge to credit card transactions:
3.5 percent per trans-
W action, according to 1. Increased net sales: Surcharges allow merchants to
Bankrate, https://bit.ly/3L5PwLH, it's no offset some costs associated with credit card processing
wonder business owners are hunting fees, which increases net sales.
for ways to recoup some of these costs.
Business owners you serve may be wondering if there's a 2. Reduced chargeback risk: A surcharge fee may en-
way to pass these fees on to their customers to help cover courage your customers to use alternative payment
this costly business expense. methods, such as cash or debit cards, reducing the risk
of chargebacks and fraud.
The answer is yes, they can. One popular solution is to add
a surcharge to credit card transactions, but there are rules 3. Increased customer base: Surcharging makes it more
and regulations that you and your clients need to follow to affordable for merchants to accept credit cards as an ad-
stay compliant. ditional form of payment, allowing them to cater to a
broader customer base. According to Fundera, https://
bit.ly/3S1LZ3n, credit cards are the preferred payment
method for 80 percent of consumers because they offer
certain perks or rewards and are considered more con-
venient than paying via cash or debit.

Are there drawbacks
to surcharging?

Merchants need to be aware of potential drawbacks before
implementing a surcharge program, including:
The ‘P’ Android
Terminal Line 1. State laws: Some states prohibit businesses from
adding a surcharge to credit card transactions. Be sure
P1 Desktop
merchants verify their state laws before they begin sur-
P3 Handheld Wireless charging.
P5 Handheld PIN Pad
Wireless 2. Credit card company regulations: Visa, Mastercard,
Discover, and American Express each have their own
rules and regulations surrounding surcharges. The bur-
den falls on merchants to ensure that they're compliant
< P3 terminal
shown here with all the rules set forth by these companies.
3. Customer dissatisfaction: Surcharges may anger or
frustrate some customers, as they may feel that a mer-
chant is being unfair by charging them an additional
fee. Be sure merchants communicate the surcharge fee
to their customers clearly and concisely to avoid misun-
derstandings.

Is it legal to surcharge?
T: 1-877-358-6797
E: sales@dejavoosystems.com In most cases, it's legal for merchants to add a surcharge to
ipossystems.com credit card transactions. However, surcharging is illegal in
Connecticut, Massachusetts and Puerto Rico, for example.
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iPOS - Green Sheet_Quarter Page Ad_P Line_v1_colour.indd 1 2022-08-24 9:59 AM