Can I give cash back on a credit card transaction?

[BPBKara]

I sometimes have customers who ask if they can get cash back during a credit card transaction. I don't have a problem doing that as long as I have the cash in the till, but I also don't want to be charged extra % on that cash. I can't wrap my head around the logistics on how to do this, if it's even possible.

[Kpay]

@BPBKara thanks for the post! You can also open your cash drawer without actually charging a credit card - check out this thread for more details.

@LocavoreStore is right also - you will be charged fees on any credit cards that you run through Square. Hope this helps but let us know if you have other questions! 😀

[BPBKara]

Thanks for the replies! I guess I just have to decide whether to charge the customer extra for that service or not provide it at all.

Thanks again!

[cmonster42]

This is a question I just came up with as well, since the building we are located in just had our ATM taken away.

Here's the issue I have (as the square fee isn't a problem as we add that on to every swipe):

If someone buys a $2 coffee and wants $100 back and we ruing in $102 (+the swipe fee of 2.83%), how do we avoid paying sales tax on the extra $100? Doesn't that look like income in our reports? Is there a setting I need to use or a rule I need to set up to mark the $100 I ring in as not an item we sold and brought in, but as the customer paying more than the charge in order to get change?

Hopefully the OP, @LocavoreStore or @Kpay can answer this if someone else doesn't first.

Thanks!

[Chad]

Hey @cmonster42, I think I have a solution for you! 

You could create a cash back item in your item library. You can set the amount to be variable or with set values. You can then make sure no sales tax is applied to this item. That way it's marked as a non-taxable good! 😀

You can then create a paid out on your cash drawer report to track the money coming out of the till. 

[BPBKara]

So based on your responses, a discussion with my coworkers, and some hard thinking (you should see the smoke coming out my ears), here is what I think we're going to do.

Since we are a concession trailer and most times need to move fairly quickly, I am going to enter preset "cash back" items as @Chad suggested. And because we aren't your average fair food, we are not raking it in, so I am setting a minimum at $5 and maximum cash back amount at $25 and only with purchase. And charging a transaction fee to cover Square's 2.83% and leave a little extra for our trouble.

So my items will be:

$5.50 to receive $5 cash back

$10.50 to receive $10

$15.75 for $15

$20.75 for $20

$26 for $25

Once I complete the transaction, I'll enter a paid out in the report, also as @Chad suggested.

And I'm not advertising that we do this. I just want to have some sort of procedure/policy in place for when we are asked.

[Chad · Accepted solution]

Hello everyone, 

This thread has peaked my curiosity over the past couple of days. I wanted to make sure that cash back transactions could be supported by Square. I reached out to our Compliance Team to check on this. They informed me that at this time cash back transactions are not supported by Square. These transactions would be a violation of our Terms of Service. 

I apologize for a comment I had previously made in this thread about creating a cash back item. In light of the information mentioned above I do not recommend creating a cash back item since these transactions are not supported. 

I'm sorry for any confusion or frustration this has caused. 

[BPBKara]

Thanks for checking on this! I never thought it might not be allowed. That just goes to show me to always double check. 😄

It just makes it easier for me anyway. I'll have to make note of the closest ATM at future events.

Thanks all for the answers and suggestions!

[bfcstore]

Here is a primer on surcharging.  https://usa.visa.com/support/small-business/regulations-fees.html

[Russell]

Hey there @bfcstore - thanks for chiming in. 

Yes, surcharges are allowed in some states when certain steps are followed - thanks for sharing the link. I want to point out and reinforce @Chad's best answer detailing that cash advancing is still a violation of our Terms of Service - surcharge or no surcharge. 

👍