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Finance InformationCredit Card Processing: Lawfully 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 departure galore 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, dealing costs, and another expenses associated with the acceptance of electronic bank cards (credit and debit cards) are putt 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, galore businesses are charging a surcharge to customers that choose to pay for products or services exploitation 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 buying on credit a less appealing option to consumers, and galore 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 client as well.
You may wonder why so galore businesses still choose to place a surcharge on credit transactions, even as although it is strictly out in the process
agreement they had to sign once
opening their merchandiser account. Quite frankly, galore 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 merchandiser accounts wish be terminated, and they may even as be placed on the Terminated Merchandiser File (TMF) which wish do it nearly impossible for them to acquire another merchandiser account.
Card originators and banks have control over credit card (bankcard) transactions, and they can lawfully ban a merchandiser from imposing surcharges. However, they do not have any legal control over another forms of payment such as cash and checks. The largest card conceiver (VISA) has even as promulgated 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 bestowed as a discount from the standard cost charged for all another forms of payment".1
Most merchandiser accounts operate on a layer discount evaluation grid and, ironically, the private secret to beating credit card process
fees is to impose layer evaluation 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 declared to customers, and the cash cost is echoic 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 delineated 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 layer evaluation grid, merchants can alleviate the cost of acceptive
credit cards, piece still providing their customers with the freedom to choose their preferred know-how
of payment.
1. Promulgated 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 Merchandiser Council is a free resource dedicated to assisting businesses receive and manage credit card process
and merchandiser account services. A wealth of merchandiser account information can be found at MerchantCouncil.org.
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