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How do I add a surcharge to a sale?

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How do I add the fee to the customers bill?

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Good news! We launched a 'Service Charge' feature in the US! Check out more information here

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As a second tax is the easiest way. Make sure to post a sign stating your policy though!
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I have read several posts in the community regarding this same question and have learned a ton so far. But a few people have mentioned adding a second tax and I am unclear of how to do this? Can someone explain further? Our business is mostly services so everything will be done through square invoices. I have added the fee as a tax, but if our client pays cash, it’s still showing the fee amount as uncollected? Any help in this matter would be greatly appreciated!! Thanks in advance 

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Hey @HadleyGrey thanks so much for asking. You will add a second tax in the same way you would create your first tax, if that makes sense. So, you will go to Items > Tax > Create a Tax. If you create a second tax, it will apply both taxes to the sale.

 

Now, if you are not wanting to apply the fee to cash sales, you can simply toggle off applying the surcharge tax to the sale if they are paying through Point of Sale. Now, if you send an invoice first and then the client shows up in person and attempts to pay in cash, there will be no way for you to remove the second tax from the already existing invoice. You would have two options then, to either complete the transaction as is and then immediately do a partial refund, or to cancel the invoice and create a separate one without that tax applied. 

 

Hopefully this helps, but please let me know if you need more details or have other questions. Thank you! 🙂

AshleyK
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I added the surcharge as an additional tax, but it does not show up when someone is paying via a checkout link.  How can I add the surcharge and allow the client to see the itemized charges, when they are paying via a checkout link?

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We are looking to add a surcharge that is TAXED. It can be designed similar to a gratuity but we need to be able to label it as a "Kitchen Appreciation Surcharge" and it needs to be taxed. Can you please create a surcharge feature that can customized and taxed?

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How does Square recognize when a debit card is swiped though? Will it process as credit and then get the tax/fee? Or process as credit? We are a small bar and concerned that we will illegally post a fee to a debit card transaction. 

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Can you add it as a discount at the end?

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Thanks for the info.

We are going to try this method to see if it works out for us. 😊

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Square Community Moderator

Excellent! Let us know if you need anything, @HadleyGrey! We are here to help.

Joe
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Amount you are charging divided by 100 - the fee... so for square (3.5% + 0.15) so my fee $150 ÷ 0.965 then add the .15... so, 155.60 is what I charge... 155.60 minus the 3.5% + 0.15 is $150 even

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Note (2019): Square's per transaction fee for card payments that are dipped, tapped or swiped is 2.6% + 10c. Learn more in our Support Center.

 

Create a "Card Processing" tax but set it to 2.83% instead.  If you add the 2.75% tax, the total charge goes up that much more which means Square takes a bit more in processing fees.  By setting it to 2.83%, it almost always comes out to the right amount.  I say almost because of rounding the fee percentage, once in a while it will be $0.01 off, but usually in your favor.

 

For example, for a $100 item with a 2.75% fee taken would net you $97.25.  So you think, I'll just add a 2.75% tax to the total to make up for it, right?  Now your total charge is $102.75 and Square takes 2.75% of that leaving you with $99.92.  Well that's not right.

With a 2.83% tax added to the $100 item would be a $102.83 total charge.  Square takes their 2.75% from $102.83, which is $2.827825, rounding to a $2.83 fee, leaving you with the expected $100! 🙂

 

 

An issue with this is what about when someone pays with cash?  You shouldn't charge the Square processing fee on that order.  You could turn off the processing tax for each item but that is a PITA.  The answer I found is to set up the Dining Options of "Cash" and "Credit Card", with credit card being the default option.  Then in the Taxes section, set up a Tax Rule for the Cash dining option to disable the "2.83% Processing" tax for All Items.  During an order on your register, you will be able to switch between the dining options which then removes the processing tax automatically.

 

Hope that helps!

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Just wanted to hop in here to say, make sure this is legal in your state. Some states have laws against an additional fee for using credit cards. I'm not a lawyer, but I would create my policy to offer a cash discount.

 

Here's a website with more info on the ability to charge credit card processing fees:

 

https://www.cardfellow.com/checkout-fees-charging-credit-card-fees-to-customers/

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Square

@Shots_Billiards @NLAUtah @FACTplayers Awesome job helping out here! 💯

 

THere are a few states that actually prohibit passing along surcharges to your customer, so definitely check in with a tax professional or your local government to be sure. 

 

Should you decide to apply a surcharge, it is your responsibility to meet all legal and card network requirements. If you intend to enact a surcharge policy, you must first notify both Visa and MasterCard:

VISA Merchant Surcharge Notification Form
MasterCard Surcharge Disclosure Form

 

You can check out our Support Center article Can I Apply a Surcharge to Square Sales for more details. 

 

 


Sean
he/him/his
Product Manager | Square, Inc.
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Your Visa and Mastercard Surcharge links are not any good

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Square

@Learner - Thanks for pointing that out! Just updated them. 🙂


Sean
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Product Manager | Square, Inc.
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Discover also has a form to notify them: https://www.discoversurcharge.com/

 

Here's some other links to VISA rules/reg/info that applies (though some of these PDF's obviously have NOT been updated since the 2015 court decision allowing FL merchants to surcharge):

https://usa.visa.com/dam/VCOM/download/merchants/sample-surcharge-disclosure-signage.pdf

https://usa.visa.com/dam/VCOM/download/merchants/surcharge-considerations-and-requirements.pdf

https://usa.visa.com/content/dam/VCOM/download/merchants/surcharging-faq-by-merchants.pdf

 

VISA  is VERY particular in signage rules: Must be 32 point Arial font at point-of-entry and 16 point Arial at point-of-sale.

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If someone charges a processing fee and they are from New York, can you go after them for the fee?  Also, will square help support you if one of their retailers scammed you? 

 

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I'm only giving the info as I know it thus far:

1) I'm not sure how rules on no-fee apply if seller and buyer are in different states where one state has rule and other doesn't so will leave that to someone else to hopefully reply, but if both of you are in a no-fee state and you were charged a fee, the way I was told to handle it was to contact Visa or MasterCard or Discover to file a complaint.

2) Square isn't eBay or such where the transaction is done via their platform. They only do the payment processing so there isn't any reason why Square support would get involved. You wouldn't look to USPS or UPS/FedEx if an item wasn't what you wanted, would you?

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No one really answered the question. It's great that many interjected post about the legalities of surcharges but the question was HOW. Creating a tax doesn't really fit the bill as you assign taxes to items. This enhancement is something Square should add.

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Square Community Moderator

@AcesRun Thanks for the feedback with this. This isn't something that's on our roadmap but if anything changes we'll update everyone. 

 

The workarounds in this thread, combined with a surcharge calculator, would be your best chance at accomplishing this 👍🏼

 

 

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