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Comments on can you charge different price for cash or credit card
May 24, 2022
Comments on can you charge different price for cash or credit card from article on May 10, 2022
          Regarding Cash or Credit Prices:
          We posted and started charging customers a "3% Credit Card Convenience Fee" when they pay with a card. They have option to pay with cash or check as well, but we stopped "eating" most of those fees because we want to be in business another day.
          I also added it to our invoices. "Payments made with a card will be charged 3%".
Most customers understand. A lot of businesses are charging the fee now;
Even the government in some instances.  We started this July 2021.
How they pay depends on the customer and their finances. When I schedule appointments I try to remember too ask them how they will be paying. I tell them we take cash, check or cards but we do add 3% convenience fee if they use a card.  Some will go get cash or write a check instead. Some don't have the funds available so they have to use the card anyway or prefer to for business or convenience. But it's their choice. That 3% usually doesn't amount much for the customer, unless it's a large purchase, but it sure adds up for us.
          We actually have some that want to do ACH payments, so we set up a separate bank account just for ACH. We use it to collect and pay ACH payments to some of our vendors.
          Honestly, I have never charged a convenience fee. For me it’s about cash flow. If I can make it easier to get my money sooner, then bonus for me. Of course, I don’t like fees, but it all works out in the end. 
 Thank you,
          A follow up question to charging a credit card surcharge:  if we do so (there is no law prohibiting this in Colorado), do we need to advise our current clients on automatic payments?   Can we just institute a 2% charge?  Which is the better option in terms of attrition - advising them or instituting the charge?
 Thank you
          I think the comments focused on the issue:
  *  can you charge a convenience fee?  Yes [unless prohibited in your state]
  *  do you need to provide notice to new customers?  Yes
  *  do you need to provide notice to existing customers?  Yes
  *  will this result in loss of customers; greater attrition?  Unknown, at least to me.
          It makes sense that your customers need to know about the convenience fee before it starts appearing on their credit card statement.  You need consent to charge a customer’s credit card so it makes sense that you need consent for the convenience fee.  That consent can be conspicuous, like at the gas pump [excuse me my liberal friends, at the electric charge station] or in the contract or separate consent to charge form. 
          Your merchant processor may have its own rules and you should check with them. 
          As for attrition, that’s an interesting topic.  It would be helpful if any companies have experience and can provide the statistics.  You would think that customer could find an acceptable way to pay their bills if they don’t want to pay the increase for the convenience fee.  But some alarm companies insist on credit card payment authorized for RMR.  While the Standard Form Agreements do permit a 9% increase yearly, a 3% convenience fee takes a big chunk out of that.  It’s true that most customers are paying under $50 or a 3% convenience fee is only $1.50, but I know plenty of alarm companies can tell stories of losing a customer over a $1.50 RMR increase. 
          You have options; absorb the charge or pass it along.  Just keep an eye on attrition [and compliance with laws of your jurisdiction if you don’t want to give it all back because your state attorney general paid you a visit].  K&K will research it for you if you can’t rely on your credit card processor.  Contact Marc Daniels, Esq at or 516 747 6700 x 307.  Concierge Clients can call our Concierge Coordinator Stacy Spector,Esq at or 516 747 6700 x 304.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301