Service Fees for customers

[auntiemaes]

We are trying to implement a service fee for customers who pay with credit/debit cards to offset our own processing fees. We set up the fee and it appears as an item on our checkout screen. The issue: if a customer pays their tab and we add in the service fee, the transaction cannot be refunded. When we try to refund the transaction an error is shown on screen. Is there any way around this? Or should we just scrap this idea and raise our prices to help cover the processing fees?

[Minion]

HI @auntiemaes 

Welcome to the Square Community.   I'm not sure if you added your surcharge correctly,  but just in case this article can walk you through it.  If the problem still persists afterwards, and that's the way you set it up and it is still not working let us know.

Surcharges in general are a gray area for business.  There are certain rules and regulations that a business must abide by when adding a surcharge or convenience fee.  A surcharge also can only be added to credit card transactions and legally cannot be added for debit card transactions.

It may prove to be much less of a headache by raising the prices a few cents to help and offset those fees.

[HANDETROIT]

I used to be able to charge a 3% Convenience Fee, but all of a sudden I can't. I get a red error message which says.
It appears you are trying to add a credit card surcharge. Due to changes in payment network rules, Square canmot support credit card surcharging at this time. More infroamtion on our Service Charge feature can be found here.

When I click on the "here" hyperlink, there is nothing about it not being allowed. It just ells me how to do it & when I foolow the instructions again, I get the same error.

What happened???

[Summer2024]

Hi there, @HANDETROIT 👋

We recently updated our service charge Support Article because payment networks recently updated their rules around credit card surcharging, Square cannot support surcharging at this time, and you cannot use the service charge feature to add a credit card surcharge.

"While we work to develop a compliant surcharging feature for sellers, there are options to more effectively manage your costs, including reviewing your pricing strategy with our Pricing Calculator and using cash discounts. Learn more about our Pricing Calculator, and cash discounting programs.

Note: Surcharging is not permitted on debit cards, prepaid cards, or Afterpay transactions. Surcharging is also subject to local laws and regulations that apply to your business and must comply with card network rules, including notification requirements."

You can still add a service charge, you just cannot use the feature to add a credit card surcharge. I have given a summary of the differences below! 

A service charge is an extra fee added to a sale to cover any additional expenses outside the cost of the initial goods being sold, such as a bagging fee or delivery fee. Service charges can be a single flat fee or based on a percentage of the total sale amount.

A surcharge is a fee added to a sale by the seller to the costs of goods or services when a buyer pays for a transaction with a credit card. Surcharges are different from a convenience fee, which covers the costs of accepting payment outside of a seller’s usual channel, no matter what payment method is used.

I hope this provides some clarity! 😊