Service Charges Q&A: How can we better serve your business service charge needs?

[Tom]

Hello Seller Community — as we make our way through January, I'm stoked to have our Commerce Platform team join us again!

This time around, the focus of this Q&A is on all things related to service charges and our product team will address your questions/feedback on Thursday, January 27, at 11am PST / 2pm EST.

The Commerce Platform team manages the service charge product experience, which allows sellers to add a charge to an item or a cart before checkout. They want to know: What are your biggest use cases for service charges? Is auto-application of the charge important for you? What are the biggest gaps or pain points that you're currently encountering with service charges at your business? This discussion will help inform next steps on a wide variety of feature requests that we've received over the years.

A few examples of areas for improvement where we're looking to get feedback include:

• Bottle Deposits
• Shipping and Delivery Charges
• Card Surcharges
• Local Fees (e.g. bag fees or San Francisco Healthy SF)
• or other Temp Charges you incur.

With these in mind, please share your thoughts on what's most important for your business:

• How does the current feature set help your business, or what kind of workarounds do you have to enact to get the necessary result?
• What improvements in reporting, application and refunds flow would make your life better?

Click Reply below to share your experience or post a question ahead of time, and we’ll address as many posts as we can on Thursday, January 27th!👇

We are not able to offer tax advice nor are we are not able to address issues related to specific payments, deposits, or account status details in our public forums. If you need assistance on one of those topics, please contact our Customer Success team and they'll be able to take a deeper dive into your account.

[divyar]

@PartyManiaMD

Creating a non taxable item ‘Bag Tax’ does seem to do the trick for most sellers. Please share any gaps in this workaround that will give us insights while we work on an intuitive Bag Fee experience.

[Gus]

So how do you do the following then for NY?

Especially how to do you get the fee to appear on the receipt, 

And how do you charge sales tax only on the amount in excess of the fee (let's say I charge $.50 per bag , so $.45 is taxable)

Publication 718-B, Paper Carryout Bag Reduction Fee, lists those localities that have enacted the five-cent paper carryout bag reduction fee.

The paper carryout bag reduction fee:

• is not included in any amount that is subject to sales tax; and
• must be collected in addition to any sales tax due on the transaction.

The receipt must separately state the bag fee and include the number of bags provided.

Sales tax vendors must report and remit the fee on Schedule E, Paper Carryout Bag Reduction Fee, which is filed as part of their periodic sales tax return.

The paper carryout bag reduction fee is not included when calculating the vendor collection credit.

Important: Any vendor who charges a customer for a paper carryout bag in a jurisdiction that does not impose a fee (or charges in excess of a locally imposed fee) is selling tangible personal property subject to sales tax.

[trendingupward]

It would be nice if the service charge was auto applied if the person pays with a credit card or when the pay with a credit card under a certain threshold. Currently we have to remember to enable it whenever they are under our $10 minimum. 

[divyar]

@trendingupward 

Thank you for your feedback. This request is on our roadmap.

[pnhcomp]

I am wondering how to offer Square installments or Square financing to my customers on an item that I sell on the online platform? Are they able to choose this when they checkout and I just can't see it on my end? Do I have to set this up? Not really any information on this through the website or online.

[divyar]

@pnhcomp 

I can check with my colleague who handles this and ask them to respond.

[pnhcomp]

Also, this is unrelated to shipping, but has anyone else had to re-design a page because it did not save, even though it said it did or I am I the only one? This has happened to me about 4 times now and wasted about 14 hours of work time now. I've made a page perfect with hours of typing and it just goes away even after I save or it "Autosaves", leaving me to try to re-design everything from memory. How Frustrating!! I have to now copy every little change I make. I honestly might leave Square because of the website builder wasting our time. My business can't afford to waste time like that and I'm pretty sure it's going to happen again. My internet connection is fine so it's not that. Can someone fix this on the Square website builder??

[ENGBeauty]

Would love to see the Loyalty program change a bit

I'm currently being charged every time a customer shops plus if they use a rewards.
It be better to only charge the time the customer shops per day which sets us back when they shop and shop again and then claim a reward. We are now charged 3 - 4 times per day for that customer and after 499 uses we enter the Tier 2 pricing.

Also, I would love to see discount section improve a bit. For example - discounts from loyalty customers to expire in less than 3 months, Maybe a week or days. Also to allow the discount to have more options to allow us to track down which sales, coupon codes work more in our favor.

[divyar]

@ENGBeauty

I can check with my colleague who handles this and ask them to respond.

[ber]

I can only address the areas specific to my business:

Shipping charges...Since 2016, I have used a standard, flat-fixed fee of $4.99 for each online purchase without regard to the number of items purchased.  It has probably hurt me on the smaller orders and equally on the larger orders simply due to ever-increasing shipping charges.  I am considering switching to actual shipping costs shortly down the road.  Actual shipping costs will definitely be the norm when I open up sales and marketing in Canada and the U.K.

Event Space Expense...We participate in more than 40 Art, Craft, and Vintage Market events in any calendar year.  I've seen the average event space fee increase by an additional 50% over this two-year-long COVID period.  I am amazed how new and smaller events are charging $100 like it was a standard.  Be aware that there are also "rain or shine" clauses.  Not to mention, we also need to worry about "event cancelation outside the promoters' area of control."

When a customer asks for a discount, particularly on a single item, they are obviously not aware of what we face in today's marketplace.  I address that by indicating my only discounting occurs with purchases of three or more items.

[akmatthews]

@ber 

Thanks for sharing. Square Online offers a shipping feature that can help with your shipping needs. Is there something specific that you're looking for?

For your event space expenses, are looking to pass these charges on to your customers? Would love to better understand your needs around this.

[ber]

I am trying my best to maintain my existing product pricing while I am affected by rising space fees and increased shipping costs.  The only thing that I know about square online is the 3% added expense that I don't want to incur.  I haven't done a deep dive on Square online.  Many shipping services offer tailored services and pricing.

[mariallama]

We're a dine-in restaurant that also fulfills to-go orders. We charge a 20% service charge for dine-in and a 15% service charge for to-go. We use Square for Restaurants for dine-in  where we use the automated gratuity for the 20% service charge, but for to-go, we have to use the regular Square POS app where we have to manually add the 15% service charge. It would be ideal to be able to manage orders in one POS app, ideally where the automated gratuity changes depending on the "For Here" or "Pickup" settings. Square for Restaurants is only capable of managing one automated gratuity rate at a time. It would be ideal for this and the Service Charges in the Square Dashboard to work together. 

[divyar]

@mariallama

Thank you for your feedback. This request is on our roadmap.

[kbojda]

Hi Tom,

Thank you for putting this out to the community.

Would love to have a way to charge for things like bottle or jar deposits and then be able to issue a refund when they bring them back and do not have a purchase.

Again... thank you!

With gratitude,

Kevin

[divyar]

@kbojda 

Thank you for the feedback. We are actively working on solving this.

[KLCOX03]

We have a service fee that would has to be paid on an appointment for a fitting. If the customer ends up purchasing item then we deduct that fee from purchase. If they don't purchase the item they just get charged for the service fee. We charge the fee ahead of time. It would be nice to be able to apply that service fee towards the purchase as a deposit instead of reducing the price of the product. 

[MarkDCY]

Hello, We have an Arts & Entertainment fee of 2% that is applied to each order at our POS.  It would be nice to have this automatically applied to orders.  We can manually delete it if needed during checkout.

Thanks

Mark

[divyar]

@MarkDCY 

Thank you for the feedback. We are actively working on solving similar use cases.

[JamesSandbar]

As service Charges aren't fully supported for restaurant, it should be. But reporting is our problem. 

Online (3rd party delivery) and auto gratuity charges fall under service charges which should not report under net sales in reports. They should fall under gross. Ex in the square dashboard app the net sales include service charges and are not even shown so you would have no idea what they were. On Square web dashboard the service charge are in net sales but break them down. Services charges should fall where tips/taxes/gift card sales do. As service charges are not a sale but a fee applied to service/product for separate reporting. The option to set its reporting area or just keep it out of net sales and report in gross would be helpful for real life reporting.

[TiffanyNR]

I would like an option at point of checkout to add a fee for shipping insurance. If customers add this fee, then we know as a business owner to insure their package.