Recently we wrote about the various rules and regulations around surcharging customers for credit card processing fees. Now we are addressing Convenience Fees, which are allowed in all states. This is a flat or fixed fee that can be assessed in a card-not-present environment that is a bona fide convenience, which is unusual to the merchant’s typical payment form. For example, if you normally only accept checks, but are offering the convenience of accepting a credit card payment, then charging a separate fee is allowed. Here are the guidelines:
- The fee must be a fixed dollar amount regardless of the amount of the sale.
- Fee cannot be a percentage of the sale (that would constitute a surcharge fee).
- Fee must be included in the total sale amount.
- Fee must be disclosed prior to the sale.
- Fee cannot be assessed on a recurring billing charge.
- Fee cannot be applied to another form of payment.
To confirm, fees cannot be assessed in a card-present environment. The caveat here is that e-commerce merchants, whose primary payment method is already via credit cards, cannot add a convenience fee – the exceptions being government agencies, schools, and colleges.