leah_s Posted 10 Feb 2013 , 3:01pm
post #1 of

AIn late January the rules changed. You are now permitted to add on a convenience fee to recoup up to 4% of your credit card fees.

34 replies
DeliciousDesserts Posted 10 Feb 2013 , 3:51pm
post #2 of

AWorks great for me. I use square 3.75%

leah_s Posted 10 Feb 2013 , 4:03pm
post #3 of

AMy Square is 2.75%

DeliciousDesserts Posted 10 Feb 2013 , 4:04pm
post #4 of

AYes. If you can't swipe it's 3.75. Usually my credit card clients are also my out of town brides.

KoryAK Posted 11 Feb 2013 , 12:12am
post #5 of

I heard about this.  Is anyone (here) going to actually do it? 

leah_s Posted 11 Feb 2013 , 12:22am
post #6 of

AAlready started.

Annabakescakes Posted 11 Feb 2013 , 1:09am
post #7 of

A

Original message sent by KoryAK

I heard about this.  Is anyone (here) going to actually do it? 

Hell yes!

KoryAK Posted 11 Feb 2013 , 4:47am
post #8 of

OK so what exactly are you doing? Flat fee or percentage? How much?  How are the customers taking it?

 

I have an open shop so I was thinking about a fee for those small coffee or one cupcake sales but I don't know how well it will go over for larger orders. 

vgcea Posted 11 Feb 2013 , 5:14am
post #9 of
Quote:
Originally Posted by KoryAK 

OK so what exactly are you doing? Flat fee or percentage? How much?  How are the customers taking it?

 

I have an open shop so I was thinking about a fee for those small coffee or one cupcake sales but I don't know how well it will go over for larger orders. 

Excellent questions. I can just see some of my clients balking at any extra $$ added to their totals. But the % adds up... too much to absorb into my profit margin.

Annabakescakes Posted 11 Feb 2013 , 5:30am

AI think splitting it with them sounds fair. What do you think? 1.75%

winnipegkaty Posted 11 Feb 2013 , 5:32am

In general, I don't like being dinged for the vendors banking fees.  Perhaps factor the cost into your pricing, and offer a discount if people pay with cash?  I know the outcome is the same, but then it doesn't feel like people are having to pay an additional fee just for the privilege of using their credit cards.

KoryAK Posted 11 Feb 2013 , 7:19am

Looking at a couple of articles about the issue..

http://www.app.com/article/20130204/NJBIZ/302040092/Your-money-N-J-retailers-could-charge-more-credit-card-transactions-many-won-t

 

This one gives the list of the 10 states where you can't surcharge and it looks like other states are introducing legislation to prevent it.

http://www.forbes.com/sites/moneybuilder/2013/02/07/most-retailers-shy-away-from-credit-card-surcharge/

 

And this article mentions that it is only for credit card and not debit card transactions

http://www.cbsatlanta.com/story/20719106/credit-card-surcharge-now-legal-but-may-not-happen

 

For me, I pay $.65 per debit transaction and $.20 + whatever (variable) % for credit card transactions. The tipping point is at the $25 mark - credit it better below, debit is better above.  If someone hands me a debit card for a $5 tab, I will run it as credit.  If I am charging a surcharge, now the question is $.65 to me or a surcharge to them.  I know it would be very small, but you know how people can get all twisted!  Also it's only on Visa and MasterCard, but not Discover.  I'm wondering if with all the additional training, room for error, potential ticked off customers, and additional paperwork it's too much trouble!

KoryAK Posted 11 Feb 2013 , 7:51am

http://knowyourcard.org/articles/checkout_fees

 

OK I've made my decision: no fees for me.

leah_s Posted 11 Feb 2013 , 12:14pm

AOn my food truck my menu prices include sales tax. Passing this credit card fee on to the consumer isn't hard for them to accept.

Annabakescakes Posted 11 Feb 2013 , 1:40pm

AI think that most people are used to having the final price be much higher than the price that gets them to book, whether it be a hotel, rentals, cars, and appliances and such. There are always taxes, convenience fees, disposal fees, early check-in fees, and the like. My cell phone plan was $140 a month for 2 phones and by the time the bill came, the lowest it ever was is $178, after FCC fees and 911 surcharge, and city, county, state taxes and the texting, and picture messages fees. And Katie bar the door when we went over our texts or minutes!!! It's just the way of the world.

kikiandkyle Posted 11 Feb 2013 , 2:24pm

It might be the way of the world but I personally don't appreciate being charged extra to the stated price for something that is a business expense, and I would think twice about shopping somewhere that told me there'd be an additional 4% charge for using a card. If you put prices up and cited rising expenses, I wouldn't flinch. Now that's the way of the world! 

Annabakescakes Posted 11 Feb 2013 , 2:49pm

AWell, they can always avoid it by paying with a check or cash. My credit card fees for Square were $210 last year, and PayPal was another $110. If I had that right now, I could've paid my electric bill with it. And, I am not allowed to charge extra for tax, but I pay it! I have 10% of every dollar taken in just those 2 fees.

jason_kraft Posted 11 Feb 2013 , 3:06pm

A

Original message sent by kikiandkyle

It might be the way of the world but I personally don't appreciate being charged extra to the stated price for something that is a business expense, and I would think twice about shopping somewhere that told me there'd be an additional 4% charge for using a card. If you put prices up and cited rising expenses, I wouldn't flinch. Now that's the way of the world! 

Agreed. Charge everyone as if they were paying by credit card (including the fees), that way credit card users don't feel like they're paying more and you make additional profit on cash and check payments.

Sassyzan Posted 11 Feb 2013 , 3:49pm

A

Original message sent by jason_kraft

Agreed. Charge everyone as if they were paying by credit card (including the fees), that way credit card users don't feel like they're paying more and you make additional profit on cash and check payments.

Yup. What he said.

-K8memphis Posted 11 Feb 2013 , 4:31pm
Quote:
Originally Posted by Annabakescakes 

... And, I am not allowed to charge extra for tax, but I pay it!....

 

what do you mean?

Annabakescakes Posted 11 Feb 2013 , 6:49pm

AI mean, when I add up the cake, cupcakes, delivery, I cannot charge tax. But 4 times a year, I add up all my sales and pay tax on it.

jason_kraft Posted 11 Feb 2013 , 6:52pm

A

Original message sent by Annabakescakes

I mean, when I add up the cake, cupcakes, delivery, I cannot charge tax. But 4 times a year, I add up all my sales and pay tax on it.

Of course you can charge tax, there's absolutely no reason for you to be paying sales tax out of pocket.

If there is some weird rule in your area that prohibits itemizing sales tax separately, just increase all your prices by the amount of the sales tax.

Annabakescakes Posted 11 Feb 2013 , 7:03pm

AThe ugly, fat greasy IRS guy told me, and so did the rude little snot when I called.

Leah_S, do you charge additionally for tax? (We're both in Ky)

And even if I raise my prices 6%, without it being labeled as such, it will still feel like it is coming out of my pocket. ;-)

jason_kraft Posted 11 Feb 2013 , 7:06pm

ACould you be referring to income tax? The IRS has nothing to do with sales tax, it is managed by your state's dept of revenue.

denetteb Posted 11 Feb 2013 , 7:12pm

  I understand the fee rule change but don't you think most businesses were figuring their credit card fees into their costs already, that it would be a part of their cost of doing business?  So why would the charge go up immediately for this new law change?  It seems to me that the prices would remain the same but they could allow a discount for cash payers.  I would love to see all businesses give a discount for cash.

Annabakescakes Posted 11 Feb 2013 , 7:14pm

AYou know? You MAY be right :oops: either way, taxes suck! I don't mind paying for roads and bridges and police, and people who need a hand up, but the utter nonsense we pay for is gobsmacking!

leah_s Posted 11 Feb 2013 , 7:45pm

AAnna, KY exempts WHOLE cakes from sales tax. You have to pay ( and if course I add it to the customers invoice) for cookies, candy and cupcakes. The rule is literally, if you provide a fork with a whole cake you have to tax it. No fork, no tax on a whole cake.

Stop laughing.

It's in the sales tax rules. Srsly.

BakingIrene Posted 11 Feb 2013 , 7:51pm

Tax rules are silly for sure.  Here you pay 13% (!!!)  sales tax on a muffin or two...but if you put six of them in a bag, no sales tax.  The convenience store closest to campus (24 hour noshing) has this sign up.

ellavanilla Posted 11 Feb 2013 , 7:56pm

Here in California, if the food is taken away/not eaten on site, you don't have to charge sales tax. Unless the law has changed...

jason_kraft Posted 11 Feb 2013 , 7:58pm

A

Original message sent by leah_s

Anna, KY exempts WHOLE cakes from sales tax. You have to pay ( and if course I add it to the customers invoice) for cookies, candy and cupcakes. The rule is literally, if you provide a fork with a whole cake you have to tax it. No fork, no tax on a whole cake.

That's a pretty common rule, the intent is to make sure prepared food (stuff that can be eaten on-site) is taxed. If you'd prefer a simpler sales tax code I'm sure the state would be happy to eliminate the exemption for baked goods sold without utensils. ;)

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