I do believe it is legal to charge the convenience fee these days (it wasn’t always, not sure how long ago that changed).
In my case I don’t charge any premium for paying by cc re:T1 work, but don’t offer the cc option for T2 invoices…
It is legal but why not just bury the 3% into the final price so it’s transparent to the client. I picked up a Square device just in case customers pay by debit or credit but i don’t plan to pass on the fee.
Like David Officer, I also use Square for processing. I started accepting credit cards originally because I found that it was the only way to get paid with some personal tax clients. Some clients live month to month, and I learned early on that a client picking up the returns often apparently didn’t have cash or a cheque, but it was pretty hard for them to say that they didn’t have a credit card in their wallet. I feel that avoiding writing off even only a few billings would more than pay the acceptance fees, and eliminate having to chase those clients – never an enjoyable task. I chose Square because they don’t charge monthly service fees, although there may be other providers.
Square charges between 2.65% to 3.4% depending on type of transaction. I have access to a few other options. Send me a message and i can pass on the details.
That is EXACTLY why I offer it for T1’s. And I also use Square, having previously used & liked Dream payments (until Moneris swallowed them up). Have also tried and was unhappy with Costco’s Elavon service.
I went to credit cards years ago when one day during tax season a drawer in the front desk was full of cash, and it hadn’t all been accounted for. I don’t add a fee, it is convenient for me.
I usually have the invoice prepared and ready when clients come to pick up their taxes/financials/etc. I don’t know ahead of time if they will pay by credit card.
@NiceGuy
I have tried or looked at various providers, but since I rarely have a client that wants to pay by credit card, I find that Square is best - no monthly fees. However, they charge 3.4% which is high, so I charge my clients half of that and explain to them why. Then, often, they choose a different payment method.
I agree with @LMK@mark@gaymwise that it is a convenience and/or a marketing tool - being able to offer that payment option. I just don’t think that tool is worth 3.4%.
$.10/debit transaction. I also use QBO which allows the client to pay by CC when invoiced. Once paid I release the return. CC cost is similar to Square.
One basic question- is it legal? You need to check the terms of the agreement with the provider (Square, Monerais, etc.) to see if this is allowed. If it’s not, then you are breaking the terms of your agreement.
However, the info on those web pages does not say you can’t charge a fee to your customer. The second link specifically says you CAN charge a fee. In further research, I can’t find anywhere that says it’s against the law. At most, Amex/Visa/MC might force your provider (Square/Chase/First Data/etc) to cancel your account with them.
Wouldn’t affect me much if they did. But, for those who have a POS terminal or a payment provider that charges a monthly fee anyway, why would you bother charging a transaction fees to only credit card customers? You’re paying for some part of the service whether your customers use a credit card or not. In that case, I think it would be easier (not to mention more equitable) to increase your overall prices as suggested by @David_R_Officer , and thus spread the cost among ALL your customers/clients (and also keep you compliant with your service provider agreement).
I have successfully gotten refund on such fees from the provider by contacting them and providing proof of such fee and info on the business, and I got it back on my credit card. I don’t know how they deal with the business who charged me the fees, but in both cases I was forced to pay it by the business (it was car towing and appliance repair, and a 3% and 5% fee).
I used to charge the convenience fee. then change POS systems, and am no longer able to.
Instead I gently push my clients to pay vie interac etransfer, then they end up paying the transaction fees anyhow!