When you encounter a supplier who struggles with the costs of card acceptance and is contemplating surcharges, ask the following questions:
One End-User's Strategy
Recharged Education's Lynn Larson heard from one end-user who is finding success in dealing with suppliers who want to impose a surcharge for card payments. Following is what Ms. Artemisa (“Marti”) Alegria, MM, CPCP, pCard Specialist/pCard Program Administrator, Tucson Unified School District, shared:
In anticipation of vendors attempting to surcharge, we changed our terms and conditions to reflect that:
- credit cards are our preferred method of payment
- our District will not pay any additional fees for credit card payment processing
We took it a step further to indicate that our District reserves the right to deduct a 5% check processing fee when credit cards are not an available method of payment. This piece is intended strictly to address vendors who refuse our card payments, even though they are confirmed “card acceptors” of our card brand. Since March 2013, we have converted over 1,100 vendors from check payments to P-Card. As a result, the estimated process cost savings to the District is $275K in our very first year (albeit a partial year) of the P-Card program.
Questions to Ask Suppliers Who Still Want to Surcharge
The following questions pertain to the networks’ requirements related to surcharging; access the related links.
- Does the supplier have documentation showing it provided the required notice to card network(s)?
- Can their software differentiate between a debit and credit card?
- Is there notification at the POS, payment page or catalog that the supplier surcharges?
- At the time of purchase, is there an opt-out option?
- Will/does the receipt show the surcharge amount?
If the supplier meets the requirements, your organization needs to determine how to respond.