The question below drew a lot of responses. Thank you to all the dealers who responded to this question. If you have a question to pose to your fellow dealers, please don’t hesitate to send it!
- I would like to know how other dealers are handling this credit card situation. Our yard is about 75% pro and 25% consumer/do-it-yourselfers. We routinely take credit cards in the store. Our problem now is that we have some contractors with reward cards who are paying off their account balances this way and the charge can be as much as 2.8%. Thanks for your help!
Many dealers responding do not allow discounts if a contractor pays by credit card. Others give a discount that is smaller so that they can recoup the processing fees. There are even a few who are charging a “handling fee” of between 2% – 3% to use a credit card.
One dealer said that he charged 3% if a contractor paid off their account with a credit card but allowed the card to be used with no extra “handling fee” if they were allowed to run the card weekly (every Friday).
Another dealer said he dealt with this on a case by case bases but he had been known to adjust margins across the board for customers who pay their account by credit card. There were also several who said they had a separate pricing table with 3%-4% added for those who regularly pay with a credit card.
And still another dealer had this to say, “We do our best when going after new business to ascertain if a customer plans to use a credit card to pay his bill and we factor that into the price we quote them. We do have some very large 1MM plus customers whot pay all year with credit cards and we do our best when pricing to add a couple percentages knowing we will lose it when they swipe. We find that some contractors are okay with a 2% higher fee knowing they will still be able to gain those miles/points. But you can’t forget about it and eat it all day. We train our counter sales, outside sales and managers to always consider these fees when going after new business and hope they take it into account when they price jobs.”
Many dealer suggested that your Credit Manager needs to stay on top of these fees and shop often to be sure you can’t get a lower one.
We asked one of BMSA’s Associate members, Basys Processing, to share some information that was recently discussed at an Association roundtable meeting on this very topic. Click here for that information.
They also said the following:
There are a lot of fine rules around surcharging and convenience fees, which can be very frustrating and confusing.
We recommend adding a line item to your invoice that says “handling fee”. This is completely legal and acceptable. Stay away from any wording that gives the impression that the “handling fee” is to offset the cost of credit card processing fees. This is what allows you to recoup the cost for a sale and make your own rules as to how and when you charge it. This would not be tied to the card brands, this would be your own internal process.