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Credit InformationCredit Card Processing: De jure Beat the System by Passing Process
Fees to Customers
by:
Jack Lang
Imposing surcharges on credit card transactions is illegal, and it wish only lead to problems. The private secret to beating the credit card process
system is not charging much for credit card sales, but instead is charging less for cash sales. It may sound like the same thing, but there is a big difference.
The increasing cost associated with acceptive
credit cards are deed many a merchants searching for route to pass on
at least a portion of process
expenses to their customers. Card originators such as VISA and MasterCard are becoming wary of this new trend and are enforcing strict regulations specifically designed to hinder any such efforts by merchants to impose surcharges on credit card purchases.
Discount fees, dealings costs, and different expenses associated with the acceptance of electronic bank cards (credit and debit cards) are golf shot a strangle hold on to the NET profits of businesses of all sizes. To help minimize the impact that process
cost are having on profits, many a businesses are charging a surcharge to customers that choose to pay for products or services mistreatment a credit or debit card.
Card originators such as VISA, MasterCard, American Express, and Learn have a lot to lose if the practice of imposing surcharges on credit card transactions becomes popular among merchants. Once
merchants impose surcharges on credit transactions, they do purchase
on credit a less appealing option to consumers, and many a consumers choose to avoid the additional cost by just paying with cash or a check. A decrease in the use of credit cards by consumers translates directly into lost revenue for process
banks. Not only do banks lose out on the process
fees that they would-be have collected from the merchant, but they lose any finance charges that would-be have been incurred by the consumer
as well.
You may wonder why so many a businesses still choose to place a surcharge on credit transactions, even as tho'
it is strictly impermissible in the process
agreement they had to sign once
opening their bourgeois account. Quite frankly, many a business folk choose to ignore this clause in their process
agreement and impose a surcharge anyway. This approach is not recommended. Once
and if these businesses are discovered, their bourgeois accounts wish be terminated, and they may even as be placed on the Terminated Bourgeois File (TMF) which wish do it nearly impossible for them to acquire another bourgeois account.
Card originators and banks have control over credit card (bankcard) transactions, and they can de jure ban a bourgeois from imposing surcharges. However, they do not have any legal control over different forms of payment such as cash and checks. The largest card creator (VISA) has even as publicised information stating that, "You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash piece is conferred as a discount from the standard cost charged for all different forms of payment".1
Most bourgeois accounts operate on a bed
discount rating grid and, ironically, the private secret to beating credit card process
fees is to impose bed
rating on your products and services as well. The old saying, "if you can’t beat em’, join em’" applies perfectly.
While you can’t charge extra for credit card sales, you can charge less for cash as long as all prices are clearly explicit to customers, and the cash cost is echolike as a discount from the innovational purchase price. For example: if the cost tag on an item states that the item cost $10, the cash cost must be delineate as a discount from that price. The cost tag for this particular item should look thing
like this:
Price: $10.00
5% discount for cash payment @ $9.50
5% Discount for Check Payment @ $9.50
By utilizing a bed
rating grid, merchants can alleviate the cost of acceptive
credit cards, patch still providing their customers with the freedom to choose their preferred know-how
of payment.
1. Publicised by VISA in the Card Acceptance and Chargeback Management Manual for VISA Merchants, ©2004
Just about the author:
Jack Lang is the senior contributor member at http://www.merchantcouncil.org.The Bourgeois Council is a free resource dedicated to assisting businesses receive and manage credit card process
and bourgeois account services. A wealth of bourgeois account information can be found at MerchantCouncil.org.
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