Cash or Credit, You Pay The Same

As we get closer to hitting the road, the topic of “Convenience Fees” and “Surcharges” is something we see lately as a consumer ourselves. Interestingly we had a question on our November Survey about this and the responses were interesting. We will show those down below but let’s hit the main point from our perspective as a merchant and as a consumer. Personally we don’t like this way of doing business (as a consumer), and as a merchant we’ve researched it and frankly….there’s too many things you are “supposed” to do to be compliant with the merchant agreements. So when it comes to our new food truck, what does this mean to you?

No Surcharges or Convenience Fees From Us!

We really don’t care how you want to pay for your food, cash, credit, gift card, (Manual Labor?)! That’s why we don’t buy into the Credit Card “Convenience Fees” or Surcharges. In fact most people don’t realize they are not even the same. We’ve run another business for years and we just don’t believe in them. The folks that replied to our survey for the most part didn’t like them. Some said they understand why merchants do it, but we want to also provide a little consumer education here too. We’re betting you are not really sure how it’s “supposed” to work which we will touch on in a minute.

Being Compliant Takes Work

The thing most people don’t know is there are a lot of rules when you want to charge these fees, and a Convenience Fee is not the same as a Surcharge. Look, we hate paperwork, so this is the biggest reason we don’t do this, in fact Square themselves states in the FAQ section on this page, they have no mechanism to do compliant surcharges.

We also feel that money you’d pay in a fee is better served tipping our staff for their hard work. At the end of the day you are paying for our food and our service, and with that for us comes costs of doing business, which is really where the costs of credit card processing falls, same as gas for the truck. Here is just a few links to articles and some key points to understand about these. All we can suggest is like any consumer educate yourselves and start asking more questions.

Understand a Convenience Fee vs Surcharge

• https://www.nerdwallet.com/article/small-business/convenience-fee
• https://www.nerdwallet.com/article/small-business/credit-card-surcharges

NerdWallet does an awesome job of explaining this but here is the excerpt and read it closely.

A convenience fee is a fee that a merchant charges a customer for paying in a manner that’s not standard for the business (for example, by mail or over the phone with a credit card). A convenience fee is technically different from other charges a business owner could impose, such as a service fee or surcharge

• A service fee is a convenience fee that’s only for certain types of education and government merchants.
• A credit card surcharge (sometimes called a checkout fee) is a fee to cover credit card fees associated with a transaction.

Just Some of the Rules

• Merchants must give 30 day’s written notice to the card network and payment processor before initiating surcharges.
• A surcharge can’t be applied to purchases made with debit or prepaid cards.
• The surcharge fee can’t be more than the cost of processing the credit card and is capped at 3% of the purchase price for Visa cards and 4% for Mastercard.
• Notice of the surcharge must be given at the entrance of the business and at the point of sale. For online transactions, the surcharge notice must appear on the business’s website where the card brand is mentioned.
• The surcharge dollar amount must appear on the receipt.

Final Word From Us

So I can tell you that we are “considering” a cash discount option at the window, which even according to our Square rep is the “better” way to do it as there is nothing to consider in the way of compliance. The bottom line is the price on the menu will be the same no matter what and if we end up deciding to offer a cash discount, it would be no different than other discounts we are looking to offer. We are not 100% sure we will do this but we may try it out and we’d love your feedback.

UPDATED: We in fact do offer the 3% cash discount as of the day we started our soft opening.