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Credit Card payment surcharge
We have noticed a surge in the use of Credit Cards for payment recently and I am pretty sure it is due to Air or Aeroplan Miles. We have introduced a 3.5% surcharge for the use of Credit Cards on any invoice over the amount of $5,000.00. We accept credit cards for the convenience of our customers however, it is now causing some bad will when they read in their terms about the surcharge and it tends to come down to a negotiation after the final price has already been negotiated. Curious to know how anyone else handles it or what your thoughts may be?
Danny Dobriansky
Vice President / Partner
AV-CANADA Inc.
Member of the Stronco Group -
2 Replies
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Danny,
We also incur a surcharge, but only when we get charged by our bankers on a transaction basis (which seems to only occur with AMEX, or in cases of transactions above $25k for Visa)… I think everybody’s commercial banking terms are probably different. But our surcharge is never more than what we are paying the bank for the transaction. Clients using cards to pay also offers them protection from fraud, and the ability to offset expenses into the next month… As well as get airline miles. We try to route most of our big transactions (albeit usually purchase transactions) through our company AMEX, because the points we accrue allows my wife and I to take a free vacation once every 18 months, as well as enjoy huge hotel discounts, etc. It’s not something to be ignored.
When we have to charge the surcharge we always let clients know on the front end, and we explain clearly that the charge is because we are getting charged that same amount to handle the transaction that way. Most clients understand this right away.
Cheers,
Bob BonniolMODE Studios
http://www.modestudios.com
Contributing Editor, Entertainment Design Magazine
Art of the Edit Forum Leader
Live & Stage Event Forum Leader
HD Forum Leader -
Instead of adding the surcharge you could try just increasing your prices to cover this cost of doing business, then you can offer your clients a 3.5% discount for cash or check.
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