Credit Cards, Legality And Ethics

curapa

I am now accepting Visa, MC, and Discover and I have a question.

Does anyone see a problem with passing along the 2% fee my bank charges me per credit transaction along to the customer? I wondered if there were any legal issues prohibiting me from doing so?

Patrick

You can charge more to take a credit card. Raise all your prices by 2% or more, and if that really does make a difference, offer your cash customers a discount.

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Meetre

I'm not positive, so you will want to read your merchant account information, but I believe it is against someone's rules to charge more for using cards. Again, IANAL, but I'm near positive that I've read that somewhere, so look into it first

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Mike Finley

It's a blatant violation of the TOS. You can't charge more, you can't ask for id, you can't require a minimum amount. Those are the big 3.

coolflatroof

You see... is service biz YOU set the price, and you can up it or give a discount as there is no list price... so you can a standard (credit card) pricing that you give in a proposal/estimate and mention the 2% discount for check/cash.
Of course this assume that you built that 2% into the standard price...

Since you set the pricing, I don't see a legal issue there... you can always offer a discount to any one...

I personally would not accept CC for now... bu that is just me...

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MALCO.New.York

Well! Hell!!! They do it at the Gas Pump!!!

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JonM

Here in CT, they had to pass special legislation in order to do so.

boman47k

Hmm, wonder what the logic is behind that?

Mike Finley

The logic is based on a couple of things - the credit card companies are concerned with keeping a brand image and keeping their product held in high regard, they don't like the onus of you not being trusted, it's their card, it's their network, it's their money, they say if you have a valid card and it's signed and it matches your signature then it's good enough for them and no merchant has the right to decide it isn't. The other side of it is keeping their brand and image highly regarded so they don't want to be involved in their users getting into identity theft, once again, signed valid card is all you need to use their service, you don't need to expose yourself to further risk by handing over your Id with your home address, license number or any other information to some loser at 7-11 who is going to use it to make a few bucks selling your info to some illegals.

The only time any merchant can ask for id is if they think your signature on your card and the signature you just signed on the slip doesn't match. They cannot ask for it for anyother reason what-so-ever. They also can't deny you the purchase based on refusing to show id.

However, lots of places try it on consumers every day under the false excuse of "We are protecting you, what if someone stole your card?"

If you want to have some fun refuse to give them id and don't budge. 90% of the time the cashier will simply say okay (because some have been trained that they are to comply if you refuse, however they don't know why), but every once in awhile you will run into somebody who doesn't know better or their store doesn't either.

Then the fun starts, have them call the 800 number on the back of your card and Visa, MC or Discover will tell them not to ask for your id.

boman47k

Heheh, my bank card was stolen once. The bank might would have saved a few thousand if someone had asked for id. I do get the id theft aspect of it though. Still cost me $50. Just glad it was insured.

coolflatroof

You know, about 50% of gas stations ask me for a zip code when i pay with credit card ... that is a very clever way to verify ID and seems perfectly legal to me... but i'm no lawyer

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Mike Finley

What you are seeing is a security measure being employed that doesn't expose you to any risk. A zipcode is pretty harmless when it comes to personal information. However it is at least a good step in the direction of address verification of the credit card holder in a transaction that doesn't even require a signature.

Mike Finley

The credit card companies would rather take their own chances in regard to protecting themselves from fruadulent charges. They have massive computer programs running and people employed in anti-fraud. I think they feel being in control of their own financial destiny is the better choice then relying on some 17 year old pimply faced pierced and tatooed, text messaging every minute, punk at 7-11 to do security for them.

Remodel Bud

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curapa

Thanks for the help, I have not recieved my paperwork from the bank yet but I had a feeling it was no permitted.

2% seems like a small amount but added up over the year or years it can be quite a bit, especially if the customer pays me for materials with their CC.

Meetre

just add 2% to your costs when bidding, no reason you should pay for it. extra 2% on cash and checks, coving the bills on cc's. and don't forget, it's 2% per transaction, but do you have per transaction fees, monthly service charges, equipment rentals? 2% may not be your magic number, might be 3% depending on other charges and your sales volume, crunch the numbers and charge accordingly

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Mike Finley

One thing interesting- you do all your business by check only... you lose how much business a year by not accepting credit cards? Now take into consideration once you take credit cards how much more credit card business you will be doing that would have just been by check. I can guarantee you that people who still would have done business with you and paid by check will enthusiastically say "Oooooo you take credit cards, good I'll put the whole thing on it and get the miles/points". So I think we have to be ready when you take credit cards to accept the fact that a lot of your check business will end up being credit card business.

curapa

Great point, i'm sure it will pay for itself.

SkylineElectric

Yes it does. I'll bet either that's a teaser rate or they will levy an additional 1.5% if you use their Internet Gateway instead of a physical credit card terminal.

Per transaction fees, gateway fees, batch fees...

All merchant account charges are totally misrepresented when they set you up with an account. I predict that within 90 days you will terminate your merchant account. I say this because I've had several merchant accounts and they never charge you what they say they'll charge. They make their money in the fine print of the agreement.

GregS

I used to do a lot of credit card research back when I used to manage online transactions for my software company.

Credit cards are a convience and a pain in the ass for merchants.

You may find your sales increase slightly by those people who want the points/cashback, but probably not that much.

However, you do expose yourself to risk of a different nature.. What if someone doesn't like the job you did for them? They call up their card issuer and file a dispute. Depending on the agreement they have with their client, you may have to jump through some hoops in order to prove that you did the job as spec'ed in your contract. No contract? See previous 10000 messages about not having one.

Take cheques. Take cash. You get the money right away. You get less hassle. You get to sue them for fraud if the cheque bounces (at least here you do)