Don’t get confused about convenience fees. As a merchant with a business accepting credit cards, it is your responsibility to understand who can and who can’t assess a convenience fee, and be sure to understand the don’ts. Read on to learn more.
What Is A Convenience Fee?
Convenience fees are assessed by the merchant and are applied when customers make a payment through an alternative payment channel. While traditional payment channels refer to payments made in person (card present transactions) and those made through the U.S. mail, alternative payment channels are more convenient to the customer. Payments made via the phone, for example, or through the Internet are considered alternative payment channels with an added convenience, thus convenience fees can be assessed.
Understand the Don’ts
Before you start assessing fees for any type of payment you consider “convenient,” understand the general rules and “don’ts” associated with convenience fees.
• Convenience fees cannot be assessed for standard types of payment, such as face-to-face transactions.
• Convenience fees cannot be assessed if an alternative payment channel is the only payment channel, such as for e-commerce retailers that only accept online payments.
• Convenience fees cannot be a percentage of the sale, but rather a fixed amount.
• Convenience fees cannot be charged as a separate transaction, but instead should be included in the transaction total.
Understanding how convenience fees work can help streamline the payment process and make your business more efficient and compliant.