RDF - Retail Delivery Fee

[GBMellie]

My state (Colorado) is implementing a fee starting July 1st that applies to all orders of tangible goods sold in-state.  The fee only applies to orders in which the buyer is in Colorado and MUST be charged to the buyer (I was going to cover the fee myself but apparently that’s not allowed) and the RDF fee must appear on invoices.  Can someone tell me how to set this up in Square?  Thank you!

[Candlestore]

@GBMellie ,

Add a Service Fee --- Call it RDF or whatever you want and you can add it to each sale that requires it.

Here is how to add a service fee : can-i-apply-a-surcharge-to-square-sales 

[CrowHillSoapCo]

The problem I'm running into with this solution is that I can't limit it to only charging Colorado orders the RDF fee, it's adding it to all orders.  I'm hoping that Square is working on a solution, since this would impact all Square users that might have a customer in Colorado that they ship to.  I emailed their support team about it.

[alexandriak]

Could you add it as a shipping option and limit that option to only people located in colorado? 

[CrowHillSoapCo]

I just tried this, and it won't let me differentiate states in Shipping profiles.  It's auto-selecting all 50 for my basic shipping profile and won't let me deselect Colorado to create it's own profile.   Maybe you have to have an advanced Square plan to be able to select states individually?

[andreaa]

I'm also in Colorado and trying to figure out how to get this up. I tried contacting Square but did not get an actual answer to my question. I was told I could set this up in sales tax, but this is not a sales tax, it's a fee and must be listed separately on the receipt.

[CrowHillSoapCo]

I tried in sales tax too. It won't work.  Super frustrating!  This is going to be an issue for any seller shipping into Colorado and I'm extremely frustrated that no one at Square is responding to inquiries, even if it's just to say that they are working on it.  I've even contacted Block (Square's parent company) for help and am getting nowhere.  At this point, I'm going to take down all my inventory on July 1st to prevent being out of compliance. I may have to take my site to another provider who is willing to create a solution. 😞

[CrowHillSoapCo]

It looks like this is a huge struggle in the Shopify forums as well.  

[ibrogden]

I noticed that one of our suppliers (Sysco, pretty big company) now charges us an extra $0.27 per delivery, although it doesn't show up as a line item anywhere. I was wondering why the total of all the line items on my invoices didn't match the invoices, until it clicked that there was a $0.27 difference every time.

[ArtThatSings]

I agree with you CROWHILLSOAPCO, I live in Colorado and this is really frustrating to me as well. I am also seriously considering taking down my online shop from Square, to avoid problems with RDF compliance. Square should be on top of this issue and offer a solution ASAP.....Are you guys at Square listening??

[Stargazer]

There is a feature in Square to add Service Charges, but the switch to apply it to online purchases is grayed out for me. This would be the best way to implement this fee but I don't understand why this option is not functional and the Square tech support couldn't tell me how to enable it.

A workaround is to add it as a service charge for your delivery orders and to add it to the shipping rate for Colorado in-state shipping. That is not great because it doesn't "[list] it separately on the receipt or invoice" but it will allow you to charge the extra $0.27, albeit with more work on your part to compile your final numbers come filing time. I'm going to bet that they're not going to chase after my small family business for this minor infraction because ultimately Colorado is still getting its money. Hopefully Square will get this figured out soon.

[andreaa]

A wonderful yarn shop in CO Springs gave me a fix after they spent hours of working with various Square folks. They don't charge for online order shipping, so this might not work for everyone. I've tried to recreate the steps as I remember them into a Word doc and have copied and pasted the fix here.

Log into your Square account. From your Dashboard, select “online”, then “Fulfillment”, then “Shipping”. 

Under this section, find your shipping rates. This is the section just below Shipping profiles. Select Edit and un-select “Colorado” so that you may set up a separate shipping profile for Colorado that includes both standard shipping and the new retail delivery fee.

Next, select the “Add shipping profile” button by Shipping profiles to set up the new Retail Delivery Fee charge. Enter a name (RDF), leave “default” marked for the type of profile, then click the blue “add countries”. Select United States and “done”. Next click “select states” and make sure “Colorado” has a check mark. Next click Add rate, select flat rate, call it Retail Delivery Fee (as it needs to be noted on the customer’s receipt), and select $0.27 PER ORDER. Select done and save.

I might just not charge for shipping within CO until Square can get a better solution for us. I don't have many online sales for my business that aren't pickup orders.

ETA: I ended up just adding $0.27 to my regular shipping rates for those orders shipped in CO, noting this was "shipping plus $.27 RDF" so it's sort of split out. Then I added a store policy that says something like "CO customers are charged a RDF blah, blah" so it's there if the State asks and if Square/Weebly don't get this figured out for a while.

[LeeAnnN]

This is awesome!  And thanks to the yarn shop is CSprings that was able to figure this out!  Your narrative was perfect!  I was taking a risk being non-compliant since 7/1/22, fortunately I've had minimal online orders since then.  Well only since I was non-compliant...  It does allow my flat rate shipping fee plus the CO Delivery Fee, for only in CO.

Also good reminder to put this info in the store policies.  Thank you!!

[CrowHillSoapCo]

Thanks for sharing ANDREAA! That solution is fantastic for sellers that don't charge shipping fees!

I've been really disappointed in Square's nonresponse to this issue. Shopify rolled out a solution to their seller community on 7/7. I still can't get a straight answer from Square on the phone, and no response to emails at all.  I'm thinking I'm going to cancel my Square account and go pay double/month for a provider that actually wants to help their community. 😞

[GourmetOnWheels]

If you are using Square Invoicing you have a section under the sub total and tax to add a service charge. Click that link and you can name the charge, make a fixed price or percentage.

René

[Michael80]

I have a brick-and-mortar business in Colorado that is set up for over-the-counter sales; we publicly list that we do not deliver. But I've had one customer request delivery and, since the order was large and they are local, we accommodated their request. This was right after the RDF law went into effect and, since we normally do not deliver, I forgot to collect the RDF from the customer. I paid the $0.27 RDF to the state out of my pocket.

Realizing that this situation will happen again, I created a Service Charge in Square for the RDF. I can manually add this service charge to any invoice or POS sale (Square Register or mobile app). But this is far from ideal because this is NOT a service charge; it's a tax (even though the State of Colorado classifies it as a "series of independent fees" to bypass the requirements for citizens to vote on it). So really, this should be created in Square as a Sales Tax of a fixed amount of $0.27 (not a percentage of the sale) and it should NOT be automatically applied to all items, but Square should allow merchants to add the tax to any sale (where delivery is involved).

I don't know how this would be handled for online sales; we currently do not sell online. But it should be set up so that it's applied automatically for any online sale that includes *delivery* to an address in Colorado. If the customer elects to pick-up their order from the merchant, then the RDF must NOT be applied.

Also, the collection of the RDF must be reported in Square's tax reports.

It would be nice if Square would start taking these DEFICIENCIES in their software seriously. There are SO MANY issues that have not been resolved or even addressed, some going back many years! 😠