Accepting debit and credit cards is essential in most cases if you want to make sales. Cards simplify the process for your business and are convenient for customers to use. But it’s essential that your customers are aware of surcharges before they swipe their cards. While these additional charges are often small and seem insignificant to you as a business owner, customers may feel cheated if they aren’t made aware of these charges before making a purchase. If you accept debit and credit cards, you can benefit from understanding best practices when it comes to full disclosure of surcharges and other card-related fees.
Know the laws
Before implementing surcharges for card payments, you must be aware of the laws in the locality in which you operate. Debit card surcharges are prohibited by major card issuers. Many states expand on that and further regulate a business’s ability to add surcharges to card transactions. Familiarize yourself with the laws in your state so you’re compliant and can avoid any legal repercussions.
Use visible signage
If it’s legal in your state to add a surcharge to credit card transactions, you must inform your customers by using visible signage. It’s best to have this information available to customers before they get to the checkout process. With online sales, you can require customers to click an acknowledgment about the fees. Sales in physical stores should include signage at the checkout point along with detailed information on the receipt. Requiring signatures ensures that your customers are made aware of the surcharges and agree to them.
Offsetting card processing costs
When you accept debit and credit card payments, you must be prepared to pay the processing fees. These fees can vary depending on your payment processing system. If you make many card sales, your processing fees can significantly impact your profits which is why it’s helpful to find ways to offset those costs. The following are some of the common ways business owners offset the costs of processing debit and credit cards.
- Encourage customers to pay with cash – Those who wish to pay in cash may be offered a discount. If you offer cash discounts, be sure to have visible signage so customers are aware of the price differences.
- Set a card payment minimum – By setting a minimum amount for card payments, you encourage customers to spend more and reduce the number of small transactions you must process.
- Be smart with payment processing – It’s important to be aware of the breakdown of costs associated with processing payments. This allows you to make sound decisions when it comes to choosing your payment processing system.
Customers may not be aware of the processing costs associated with debit and credit card payments. However, most business owners are very aware of how processing fees can reduce profits. Before implementing surcharges or cash discounts, know the laws in your state. Make sure your customers are aware of any surcharges by using visible signage and take some steps to offset processing fees.