Do You Accept Credit Cards?

[crazydaycarelady]

I just signed up for Square Up! I can't wait until the next parent that says they forgot their checkbook! LOL




* They do charge 2.75% but for most of my payments that isn't much and it saves me a trip to the bank.

[NightOwl]

I use the Intuit Payment Network. They can pay online and even set up recurring payments. It's 50 cents per transaction, which is fantastically low. That's the only way I accept credit cards though.

[AmyKidsCo]

That's a cool idea! I have a paypal account and would have parents use that if they wanted to use credit cards, but so far no-one has wanted to pay with credit card.

[Thriftylady]

I am going to be watching this. I had thought of taking paypal, but don't want to pay the fees.

[daycare]

nope, no credit cards here....It would cost me about $28.00 per full time kid...

I do accept wire from bank, you pay all the charges should they apply.

[Second Home]

The parent is the one who will be charged the fee , we bought football gear for my son and we paid the charge in addition to the price of items .

They will get charged every time they pay by square too, not just one time .

[Blackcat31]

The parent is the one who will be charged the fee , we bought football gear for my son and we paid the charge in addition to the price of items .

They will get charged every time they pay by square too, not just one time .

I'm not sure this is true in all states or situations.
I know they changed the law a while back but from what I understand it's complicated.

In order to charge customers for credit card processing fees you must create a dual pricing model. To accomplish this, raise all prices to offset processing fees and then offer a discount on cash purchases that's equal to the price increase.

Also, credit card companies themselves prohibit their users from having to pay a fee.

Here's what the originators have to say about passing credit card processing fees to customers.

VISA states that "you may not impose any surcharges on VISA transactions. You may, however, offer a discount for cash or another form of payment (e.g., proprietary card or gift certificate) provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment"1

MasterCard states that "A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments."2

Discover states that "You may assess a surcharge on a Card Sale conducted using a Credit Card provided that (i) the amount of the surcharge may not exceed the Merchant Fee payable by you to us for the Card Sale, and (ii) you assess surcharges on card sales conducted using other credit cards accepted by you."3

American Express states that "You must not accept the Card for costs or fees over the normal price of your goods or services (plus applicable taxes) or Charges that Cardmembers have not specifically approved."4

Every originator except for Discover forbids surcharging credit card sales, however, as MasterCard so clearly states, "A Merchant may provide a discount to its customers for cash payments." This statement holds the secret to passing credit card processing fees on to customers. The trick isn't charging customers more for using a credit card; it's charging them less for using cash.

The catch is that the cash price must be presented as a discount to the true price. This means that price tags, signage and advertisements must display the higher (credit card) price first and then display the lower (cash discount) price as a discount. For example, many gas stations offer a cash discount but they post the higher (credit card) price on their roadside signage.

1 - Source: "Card Acceptance and Chargeback Management Guidelines for VISA Merchants", Section "VISA Rules", "No Surcharging"
2 - Source: "MasterCard Rules" page 124, "Charges to Cardholders"
3 - Source: "Discover Operating Manual", page 24, "Surcharges"
4 - Source: "American Express Operating Procedures for US Merchants" section 1.7, "Prohibited Use of the Card"



If it's a debit card you are accepting, 10 states have laws prohibiting you (the business) from charging fees to the consumer. Those states include California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. (http://business.time.com/2013/01/25/...ut-not-likely/)


I don't know how much of this is still in effect or if any of it has changed but I don't see the point in taking credit cards as a convenience to parents if it costs me money. The fee may seem minimal but even at 25 cents a transaction, that is a lot of money when I multiply it by the # of payments a parent generally makes in a year (25-52) and multiply that by the number of families I have. (14)

Like I said, I am not "up" on the current accounting rules in regards to these fees but before accepting credit cards, it is wise for any merchant to do their homework.

[DaveA]

I have a square and offer it to parents if they want it, but no one does.

I have a paypal account for my craft stuff, but between fees & it's uneven time it takes to get my money out of the account it's not worth it for daycare to me.

Everyone pays with check except for one woman who doesn't trust banks and pays cash.

[Second Home]

Hmmm .

Our sports team sells apparel and supplies merchandise . They accept cash , check and charge . All charges are through square . I was working in the apparel last week and we had many charge sales , the person who runs it does the charges and told each person the will be charged the 2.75% on the charge ( no one cared ) . They do tell people up front and the customer can decide whether to charge through square or not . Maybe that is the loophole .

[crazydaycarelady]

On PayPal if the money sender checks that they are "gifting" the money to family or friends then there is no fee.

I already had a dcp bring their cc in this morning!

[Blackcat31]

On PayPal if the money sender checks that they are "gifting" the money to family or friends then there is no fee.

I already had a dcp bring their cc in this morning!

If the money sender is "gifting" this money to you to avoid the fee, they technically can't claim the money/payment for child care expenses on their taxes then.

[Passerby]

I'm a little late to this party, but . . .

MasterCard states that "A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments."

This actually changed at the beginning of 2013. Mastercard now permits surcharging: https://www.mastercard.us/en-us/merc...rge-rules.html

The same settlement that forced them to allow it affects Visa and pretty much all the other credit card companies out there as well. But, as Blackcat also said, surcharging is still illegal in some states. This article by the National Conference of State Legislatures is kept pretty well up to date and lists the states with laws against it: http://www.ncsl.org/research/financi...-statutes.aspx

If you aren't in one of those states, you can go ahead and charge parents for your credit card fees, which is going to save you a lot of money while still letting them pay the way that's most convenient for them. Just note that you do have to tell your acquirer (i.e. your bank) and the credit card company ahead of time. That Mastercard article I linked to above explains it in more detail.

Another option is to use abcdefghijklmnopqrstuvwxyz

It works similarly to surcharging, but it's a third-party service fee instead, so you can use it in all 50 states. I think some of the no-surcharge laws might still affect it somewhat--like you might need to give customers the option to pay by cash instead in states like Texas--but it's a great workaround and a lot easier. And really, who says no to cash?

Smaller daycares like DaveA's might not need to worry about credit cards, but if you take them on a regular basis, then using one of those options will really save you money.

[LovetheSun]

We do

We do take credit card with SquareUp, we also charge a fee since SquareUp takes around 2.5% as you mentioned.

I am happy with it, and is nice to keep tracks online so easily.

[LysesKids]

I'm a little late to this party, but . . .



This actually changed at the beginning of 2013. Mastercard now permits surcharging: https://www.mastercard.us/en-us/merc...rge-rules.html

The same settlement that forced them to allow it affects Visa and pretty much all the other credit card companies out there as well. But, as Blackcat also said, surcharging is still illegal in some states. This article by the National Conference of State Legislatures is kept pretty well up to date and lists the states with laws against it: http://www.ncsl.org/research/financi...-statutes.aspx

If you aren't in one of those states, you can go ahead and charge parents for your credit card fees, which is going to save you a lot of money while still letting them pay the way that's most convenient for them. Just note that you do have to tell your acquirer (i.e. your bank) and the credit card company ahead of time. That Mastercard article I linked to above explains it in more detail.

Another option is to use abcdefghijklmnopqrstuvwxyz

It works similarly to surcharging, but it's a third-party service fee instead, so you can use it in all 50 states. I think some of the no-surcharge laws might still affect it somewhat--like you might need to give customers the option to pay by cash instead in states like Texas--but it's a great workaround and a lot easier. And really, who says no to cash?

Smaller daycares like DaveA's might not need to worry about credit cards, but if you take them on a regular basis, then using one of those options will really save you money.

Charge pass requires a minimum of 10,000 a month in transactions to be free; I personally use Square & 2 parents use it as their Monthly way of paying me... and yes, they have no problem paying the fee...

[Blackcat31]

Your suggestion requires a minimum of 10,000 a month in transactions to be free; I personally use Square & 2 parents use it as their Monthly way of paying me... and yes, they have no problem paying the fee...

I "suspect" the poster may work for or have some sort of stake in the info he/she is posting.