|
Finance InformationCredit Card Processing: Wrongfully
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 effort many an 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, group action
costs, and else expenses associated with the acceptance of electronic bank cards (credit and debit cards) are golf stroke 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 an businesses are charging a surcharge to customers that choose to pay for products or services victimisation 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 many an 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 many an businesses still choose to place a surcharge on credit transactions, even as although it is strictly prohibited in the process
agreement they had to sign once
opening their businessperson
account. Quite frankly, many an 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 businessperson
accounts wish be terminated, and they may even as be placed on the Terminated Businessperson
File (TMF) which wish do it nearly impossible for them to acquire another businessperson
account.
Card originators and banks have control over credit card (bankcard) transactions, and they can wrongfully
ban a businessperson
from imposing surcharges. However, they do not have any legal control over else forms of payment such as cash and checks. The largest card mastermind
(VISA) has even as publicized
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 given
as a discount from the standard cost charged for all else forms of payment".1
Most businessperson
accounts operate on a layer discount valuation
grid and, ironically, the private secret to beating credit card process
fees is to impose layer valuation
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 expressed
to customers, and the cash cost is mirrored
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 depicted 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 valuation
grid, merchants can alleviate the cost of acceptive
credit cards, spell still providing their customers with the freedom to choose their preferred know-how
of payment.
1. Publicized
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 Businessperson
Council is a free resource dedicated to assisting businesses receive and manage credit card process
and businessperson
account services. A wealth of businessperson
account information can be found at MerchantCouncil.org.
Circulated by Article Emporium
| |
