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Credit Card Fees

  • 1.  Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 08:23
    There was a discussion recently about adding a "convenience fee" to a Credit Card payment.  The practice of always charging customers a fee for credit card payments, no matter how the transaction takes place, is called a surcharge. These are currently prohibited in 10 states-Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.
    By definition, a "convenience fee" is using a credit card if the customer is using a non-customary payment channel. For example, if you primarily accept payments in person, a convenience fee may be added if they use a mail or telephone order.  This is legal in ALL states.

    But there are also rules to follow, if a surcharge is legal in your state. The two most important are:
    1. The surcharge can NOT be more then the processing fee you are charged, or 4%.  You have to use whichever is lowest.  So, example... if you charge $5 fee for a tuning of $150.  Square, for example, charges 3.75%.  They'll take $5.62.  So you're ok.  But, if you charge $80 for a tuning, but still charge $5 fee, Square will take $3.  Your fee is illegal, and if your customer cares... you'll get in trouble.  
    2. You have to tell the customer BEFORE your add the fee.  You have to advise them there is a surcharge for CC payments.  If you add it in without telling them, that is illegal.

    Again, review the laws of your state or country.  These laws are different everywhere you go. 

    My own practice, I don't charge a fee for tunings, and regular calls.  I personally think it's a minor issue.  I have learned MOST people don't care to pay a fee, but some do.  So, The $4-$6 fee that I pay is worth the word-of-mouth advertising I get.  I will, however, add a surcharge of 3.75% for anything over $500 for repairs, rebuilds, parts, etc.

    May point.... stay safe and legal.  It only takes one bad customer to report any bad behaviors.




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    Dave Foster, RPT
    Waterford MI
    248-431-8804
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  • 2.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 08:38
    Good information.  Good Advice.  Thanks Dave

    "PTG - Expand your Horizon - Share the Vision. Providing Quality Service for the World's Pianos"

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    J
    oin us in Tucson, AZ July 10 - 13, 2019 for the 62nd Annual PTG Convention & Technical Institute.

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    Bill Davis, RPT, SERVP  

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    Marietta GA 30066-2113
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    www.pianoplace.net








  • 3.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 11:04
    Hello Dave,

    Good general info. Thanks for sharing. 

    I would like like to point out that one should also check with their local and state laws to make sure. For example, the information you provided is mostly in line with the California laws, but not entirely. California does view a surcharge as illegal, but defines a surcharge as a percentage of the sale. But a convenience fee is legal, as long as it's a fixed dollar amount (not a percentage), and the customer was told beforehand. California also adds that credit cards must not be your usual method of payment. 

    Again, thanks for sharing the general information. It's good, just make sure your state and county laws agree with it.

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    Benjamin Sanchez
    Professional Piano Services
    (805)315-8050
    www.professional-piano-services.com
    BenPianoPro@comcast.net
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  • 4.  RE: Credit Card Fees

    Posted 09-25-2018 11:12
    Thanks Dave! Like you, I don't charge an extra fee for credit cards. I knew there were some kind of laws covering that sort of thing and just didn't want to get in trouble. Not worth it.

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    "That Tuning Guy"
    Scott Kerns
    www.thattuningguy.com
    Tunic OnlyPure, TuneLab & Easy Piano Tuner user
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  • 5.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 13:15
    I don't charge a fee, either. I want my customers to be happy. Happy customers give out your name.  

    The HO could start using square, and charge only 3.75%.

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    Willem "Wim" Blees, RPT
    Mililani, HI 96789
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  • 6.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 22:00
    Do your customers really demand to use credit cards? I only get asked if I accept a credit card once every three or four years.

    Isn't it easier, simpler, and less costly to get paid by check or cash instead? It's always worked fine for me.



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    Susan Kline
    Philomath, Oregon
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  • 7.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 22:06
    Susan.  

    I get asked at least 4 or 5 times a week, on average.  Some weeks I'll have as many as 10 out of 15 appointments pay by cc. Other weeks only 1 or 2.  

    Just yesterday the estimate was $450, and if she couldn't have put it on a cc, she would not have had the work done.  

    I use use a Square and even though it costs me less than 3% per transaction, it not only brings in enough extra business to pay for it, it makes my customers happy. And as I said before, happy customers bring in more happy customers.  A win win for everyone.

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    Willem "Wim" Blees, RPT
    Mililani, HI 96789
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  • 8.  RE: Credit Card Fees

    Posted 09-25-2018 22:21
    Most of our larger commercial accounts and government accounts pay by credit card.  Concert venues, college accounts, VA Hospitals, city school districts, not to mention just normal residential customers....we don't have much of a choice as I see it.  We have to take the 3% as a business loss.  We don't charge a fee for that, but just absorb it as a cost of doing business.  Plus, we're glad to have the work, dang it!

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    Ted Rohde
    Central Illinois
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  • 9.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-25-2018 23:34
    The university deposits directly into my checking account, as does Social Security. For other institutional accounts, I give or mail them paper invoices, or some prefer to have an email invoice, and they usually send checks. The City of Corvallis also deposits directly into my account. Private customers seem just fine with cash or check. The most frequent question I get is, "Is a check okay?" showing that they wonder if I only take cash. Of course a check is okay ...

    It's obvious that Hawaii and Oregon are different places in some respects.

    While I use the credit union's debit card frequently, which probably (regrettably) is serviced by some larger entity, I prefer, whenever possible, to avoid doing any business with or giving any profit to major banks. I think they took the country (actually, the world) to the cleaners in 2008, and they don't seem to have changed their ways since. Why should they? They paid no price, they kept the illegal profits and got all of us to pay off their losses.

    Some of this may be showing my age. I remember when paying and getting paid was much more direct and simple. I remember when, if someone got a mortgage from a local bank, the mortgage would STAY in the local bank, and a mortgage customer could talk with actual physical people about a mortgage or a loan. I really don't see the benefit of having something like a home mortgage passing through twenty hands in a week or two, let alone being sliced and diced into dubious and unregulated securities. A credit or a debit card certainly makes online transactions easier, but sending everything automatically through credit, even local transactions between individuals, seems unfortunate. As individual business people, we at least have a choice.

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    Susan Kline
    Philomath, Oregon
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  • 10.  RE: Credit Card Fees

    Member
    Posted 09-26-2018 07:31
    Susan, my situation is the same as yours for my tuning clientel. With the key restoration business I get asked more frequently but everyone has managed to send a check or money order.  I explain that not accepting cc is one way among many that I am able to keep costs down. That savings transfers to their costs. However, I can see a definite need for those in resale and rebuilding.
    Deb





  • 11.  RE: Credit Card Fees

    Posted 09-26-2018 10:05
    Although it is illegal in some states to charge a convenience fee for credit cards,
    I am pretty sure it is legal in all state to offer a discount for cash or check payments.
    So perhaps you just think about it a little differently.

    Melanie

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    Melanie Brooks
    Brooks, Ltd. Piano Products LLC
    Uncasville CT
    860-848-6605
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  • 12.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-26-2018 10:05
    If you esrn $100,000 paid by credit card you will pay $4000 in credit card fees. I see no reason to subsidize credit banks hiding out in Delaware who also charge upwards of 20% interest on the other end. 

    If you took the $4000 and deposited it in your retirement account and earned an average rate of return of 6%, after 30 years the value of that account would be $335,203.

    BTW the average rate of return for the S&P 500 over a 30 year period has been 12%, then your investment would be worth $1,081,159.00

    I don't take credit cards, have never had a problem not taking them and never will take them.



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    David Love RPT
    www.davidlovepianos.com
    davidlovepianos@comcast.net
    415 407 8320
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  • 13.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-26-2018 11:42
    Someone once told me he tells customers, "I accept cash, check, or credit cards, but would really prefer cash or check."

    Sidenote: "I accept" is better, in my opinion, than "I take..." but that's another discussion...

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    Benjamin Sanchez
    Professional Piano Services
    (805)315-8050
    www.professional-piano-services.com
    BenPianoPro@comcast.net
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  • 14.  RE: Credit Card Fees

    Registered Piano Technician
    Posted 09-27-2018 09:48
    David Love wrote:
    "I don't take credit cards, have never had a problem not taking them and never will take them."

    Same here.

    Alan

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    Alan Eder, RPT
    Herb Alpert School of Music
    California Institute of the Arts
    Valencia, CA
    661.904.6483
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