TransActPOS Surcharge Module

For years, retailers have accepted that credit card payments have a back-end cost of fees and have chosen to endure this cost. Today, there are options to recover the credit card fees. Dual Pricing, surcharge, and convenience fees are all available, but selecting the correct method is the challenge to aligning with the Visa Core Rules and Visa Product and Services Rules.

 

Summary of options and their use within the DIY and similar business environments:

Dual Pricing requires that the card and cash prices be displayed on the product. For example, a $10 product would need a credit price of $10.30 and a cash price of $10.00 on the bin label. 

If the customer charged the purchase to their account, the $10.00 amount would be charged to the account. If the customer later paid the account balance with a credit card, the ability to collect a 3% credit card fee would not exist. 

 

Correct and equal application of the credit card fee to all transactions is a requirement of the Visa rules, so Dual Pricing would not apply to the DIY environment.

 

The Convenience Fee may be an idea for recouping some credit card fees, but the fine print in the Visa documentation needs to support this activity in the retail environment. Convenience fees are limited to Card-Absent environments and are set to a flat or fixed amount, regardless of the value of the payment due. 

 

So, an active retail environment aligns differently from the Visa convenience fee rules per the documentation. 

 

On the other hand, Surcharges allow for a broader application of fees to credit card transactions. In summary, the Surcharge rules are as follows:

Most states consider surcharge income, so the collected surcharge income will be subject to sales and use tax within your state. Due to the nature of the surcharge calculation after the invoice total is determined, the store must self-access their surcharge income each month when submitting their sales and use tax to their state. The surcharge is not accessed sales tax on the customer's invoice, so it is neither determined nor collected.

In the outdoor power equipment market, margins are typically razor-thin so that a surcharge would make economic sense. If there is resistance to applying a surcharge, the user could edit the document details (invoice, sales order, service ticket, rental contract, accounts receivable, etc.) and include a refund for the calculated surcharge. The resulting payment would include a surcharge, but the document would indicate that the refund amount accounts for the portion of the negotiated surcharge.

When discussing credit card fee recovery with store operators, responses often fall into three categories: a firm 'No,' a polite acknowledgment ('That's nice to know'), or the observation that 'everyone else is doing it.' Ultimately, considering your business context and customer relationships, the decision rests with you. The TransActPOS Surcharge module offers a streamlined solution aligned with Visa's rule book.

 

Please note that this document reflects the current rules as of the time of writing and draws from Visa's official documentation. For the most up-to-date rules and policies, refer to the Visa website.