Recently we wrote about the various rules and regulations around surcharging customers for credit card processing fees (remember that surcharging for a debit or a prepaid card transaction is strictly forbidden). 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.