posted on February 4, 2001 12:47:47 PM new
Check THIS out!! I have been in correspondence with Mastercard regarding credit card surcharges for credit card purchases placed via the internet.
Bottom line, for purchases placed via internet or phone, a surcharge is legal, and NOT against Mastercard rules.
Thank you for your inquiry to MasterCard International.
If the company has a surcharge for internet-based transactions and not mail-in
payments, then they are not in violation of MasterCard guidelines. The type and
number of payments available through the payment medium does not affect this
guideline.
Best regards,
MasterCard International
Customer Service Center
jmb
Your Original Message Was:
Does this mean that if the payment is via the internet for master card, a surcharge
can be added, even if the surcharge is not in place for payments mailed in?
In other words, if a company has a 2% mastercard payment surcharge for internet
payments, that is OK?
> Thank you for your inquiry to MasterCard International.
>
> MasterCard rules specifically prohibit merchants from adding a fee for acceptance of MasterCard cards. This is considered surcharging. These rules support universal acceptance of all MasterCard cards and ensure our cardholders are not discriminated against at the point of sale. [B]However, there are
business cases that may warrant a service fee for specific payment modes such as Internet
and telephone.[/B]
>
As long as the same service fee, (flat rate, percentage based, tiered rate) is
applied to each transaction method (credit/debit card, cash or check) made
within a specific payment mode (in person, mail, telephone, Internet, etc,)
the service fee is not considered a surcharge and is acceptable within our bylaws and rules. Furthermore, MasterCard does not permit service fees to be advertised as offsetting the cost of acceptance.
>
> Best regards,
>
> MasterCard International
> Customer Service Center
> acc
>
> Your Original Message Was:
>
> I came across this site, and was wondering how it can be legal to charge what
> they are?
>
> http://www.boe.ca.gov/elecsrv/payinternet.htm
posted on February 4, 2001 01:38:35 PM new
In other words, as long as you add the surcharge for ALL methods of payment through the internet, or ALL methods of payment through the mail, it is acceptable.
This does NOT mean that you can add a surcharge just for credit cards.
posted on February 4, 2001 01:55:26 PM new
What you're looking at doing then - since you cannot call it a "credit card surcharge", (according to either eBay or Mastercard's rules) - is charging a HANDLING CHARGE. It's done all the time.
posted on February 4, 2001 04:16:50 PM new
You've got a email from a customer service representative and that's one thing. But I am virtually certain that ebay has attorneys on retainer who have researched this entire situation and would disagree with your customer service rep. It comes down to interpretation. Ebay chooses to interpret conservatively and has created a site-specific rule that prevents you from doing it on their site even if you can find individuals within the credit card companies who say it's OK under certain circumstances.
Personally, I think that if a big delegation of sellers went to ebay and insisted that they should be able to charge a fee for accepting buyers' credit card through Paypal (when buyers know the ordinary stores they use it at, no matter how small, aren't allowed to charge for credit card use) it would reflect horribly on the sellers. I am a seller and I wouldn't want to get a reputation as someone who is that petty, even if you ARE justified because the cost affects your bottom line. You need to balance the amount you would gain in revenue versus the amount of customer goodwill you would lose by obtaining that revenue. Think of it this way. If you had a shop and you allowed customers to use your bathroom, but charged them a 25 cent fee for toilet paper, you would be justified, sure---toilet paper is an expense and cuts into your bottom line---but you'd lose considerable customer goodwill!!. The reason? It's not a cost of doing business that's typically passed on, it's typically hidden in price increases. The fact that you cannot easily increase prices in an auction format does NOT mean your customers will understand/tolerate your inventive methods of making up for your unreimbursed expenses. I would not support any group of sellers who tried to lobby for this "right" to pass along the fee and in fact would probably advertise myself as someone who DOESN'T charge a fee in order to capitalize on the goodwill you'd be losing.
I'm sure there will be plenty of people who will insist that their customers pay without a complaint or a problem...but you know what? I recently paid someone a paypal surcharge without saying a word, but NOT because I didn't mind, but because I don't like getting into a fuss with strangers and I prefer to keep my contact with people I buy from to a minimum in order to save time. so I paid them their 25 cent fee. But NOT happily (although I was polite.) I will NEVER patronize that person again. and I wrote to safeharbor. so you don't know if your customers are paying it willingly, or just want to get the transaction over with and are secretly thinking "How petty. I'll never do business with HIM again".
I personally want to make ebay a BETTER place to shop than in the malls, not just charge them fees that they don't get in the malls because it's "legal" (and I am not so sure that it is.)
posted on February 4, 2001 04:34:42 PM new
EBay doesn't get to include a surcharge in the formula for a FVF. For that reason alone I don't think you'll ever find eBay receptive to a surcharge. EBay would rather a seller include the 'cost of doing business' in the minimum bid. When you look at it in that light it should make sense.
Personally I think surcharges on a payment method a bit tacky and a turn off but I think it should be a seller's choice, even if it's a bad one. I hope you can see why a surcharge isn't in eBay's best interest.
posted on February 4, 2001 05:31:56 PM new
All this fuss about recovering normal business expenses involved with credit card use is ridiculous in my opinion.
A credit card is a convenience to a customer which encourages them to spend more than they might have with cash, and an auctioneers best friend. Credit card money is not real money to many people.
So adding a surcharge for its use in your auction description will negate its benefits by losing you a whole bunch of bidders. Using stealth tactics after the auction is over is bound to get both buyer and seller's blood pressure up.
Forget the 2%. The speed of payment and increase in sales makes it a good business decision. If your profits are so small that this is killing you, perhaps you should take another look at what you are doing.
Nobody who has ever had a regular retail business would spend so much time trying to recoup a normal business expense. Just newbies with no experience in the real world, or cheapies who think the customer should pay extra for everything.
If bidding is down, perhaps some sellers are chasing the customers away with this nonsense.
Of course, this is one person's opinion, someone who used to pay $30,000 a year for a seasonal retail space which it took $100,000 in sales just to cover. Count your blessings.
posted on February 4, 2001 06:33:25 PM new
[i]"add it to your minimum bid..."
Unless you're running one-bid "auctions," exactly how does one recoup additional costs by "adding it to your minimum bid"?
I see this bit of (non)logic quite frequently here at AW. But I fail to see how it works.
If you start an item at $10.00 and it regularly ends at $15.00, do you really think starting it at $10.50 will result in an ending bid of $15.50?
In some categories, adding anything to your minimum bid can kill bidding on your item altogether.[/i]
vargas - Thank you, I have yet to figure out the "non-logic" of this advice as well. Most times, my minimum bid has NOTHING to do with the price that I need to sell an item for in order to make a profit. I run plenty of auctions with a $0.01 opening bid just to attract attention. My ability to set my own minimum bid is one more tool in my marketing tool belt. You are right, raising the opening bid up too high can kill soime auctions before they even get started.
By the way, I have one item that I sell week after week. I have experimented with pricing and found that the $0.01 opening bid items close with an average sale price of $7.85. When I list the same items at an opening bid of $5.99, the average selling price is only $6.79.
