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  1. #1
    Join Date
    Nov 2003
    Posts
    1,093

    Passing on Merchant fees

    What is the legality concerning this? I ask because I see ryanair.com (one of Europe's largest no-frills airlines) are happy to pass merchant fees on to the custromer and I wonder how legal this is...

    Thanks!
    ManageMyServices was sold by me in September 2009. I no longer have any affiliation with this company.

  2. #2
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
    Posts
    7,189
    It depends on the country, etc. In the United States, you cannot state something like if you pay by credit card you will be charged 3% more. However, you can state if you pay by cash, you will be given a discount. This does not apply to government entities as well as a few others in the United States.

    Other countries are a bit different and it is OK currently in Europe I believe

  3. #3
    Are you saying this is illegal?

    http://www.drexel.edu/tipp/pay_full.asp

    My university, I quote, "must add a non-refundable 2.75% convenience fee for credit card payments". Or do MasterCard, Amex and Discover not have that policy?
    Last edited by Dan Grossman; 05-28-2005 at 11:12 PM.
    Dan Grossman - dan @ awio.com
    My Blog | Affiliate Program for Web Hosts

  4. #4
    Join Date
    Jan 2002
    Location
    Yuba City, CA
    Posts
    358
    Hi,

    If you use your credit card to pay your income taxes when you file your IRS tax return, you are also charged a convenience fee for doing that. I guess Uncle Sam doesn't want to take the hit when taxes are collected either.

    David
    David
    Beenanza, LLC

  5. #5
    Join Date
    Aug 2004
    Location
    Los Angeles,CA
    Posts
    789
    Athough I do not pass the merchant fees to my clients, I do indeed pass on some of the savings to them if they sign up for a hosting plan with yearly payment.. Since they are only making one payment a year, PayPal or 2Checkout are not charging me a trasaction fee on a monthly basis. So its much cheaper for me and my clients.

  6. #6
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
    Posts
    7,189
    Originally posted by Dan Grossman
    Are you saying this is illegal?

    http://www.drexel.edu/tipp/pay_full.asp

    My university, I quote, "must add a non-refundable 2.75% convenience fee for credit card payments". Or do MasterCard, Amex and Discover not have that policy?
    Some institutions have been granfathered in when Visa in North America passed this regulation some years back. I cannot remember them all but I do know the government was one of them since we work with them.

  7. #7
    In the US, its against card association rules to add a mark up for paying with a credit card or to have a minimum sale price for paying with a credit card, with some exceptions for the goverment, etc. However, merchants, especially retail, do it all the time. It may not be a very enforceable rule, but it is a rule all the same.

    You are also not supposed to selectively display what cards you accept (many retail merchants don't disclose they accept amex because they'd prefer to take sales on other cards, if possible, but don't want to turn away a sale altogether if all the customer has is amex). Again tough to enforce in the retail environment.

    These rules are probably easier to enforce on the internet.

  8. #8
    Join Date
    Aug 2003
    Location
    Chesapeake, VA
    Posts
    3,379
    To clarify on one point raised here... utilities, insurance, cable companies, telecommunications, government & schools all have special Visa and MasterCard Interchange categories and programs that apply to them.

    In order to participate in these special "Emerging Market" programs, merchants are typically required to register directly with Visa and MasterCard as part of the merchant establishment process so that the proper data can be transmitted on the transactions when the file build is created.

    While surcharging an amount for using a credit card is in violation of Visa/MC regs, charging a convenience fee can be acceptable in certain circumstances and merchants. And as mentioned earlier in this thread, you can provide a discount for payment in cash vs. all other forms of payment.

    All this being said - it is still not uncommon to see small retailers with signs next to the cashier desk that say "Minimum Credit Card Purchase - $10" or "$1.00 Fee if paying via Credit Card" - but all of those are in violation of the rules & regs.
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