Credit Card Fees

[happykeeper]

The cost of credit cards seems to be swinging up up up. Our credit card fees, while reasonable as a percentage, were a large expense together. So we are looking at ways to manage that. Of course, finding the best rate is one thing but the reward cards often make it hard to know who is charging you what for this type or that type of card. So we are assuming we are in the good deal range with Costco. We know there may be a little more savings out there, but we are probably not too bad off. So now we are looking at how to actually reduce credit card usage without hampering our business.
There are some inns here that have started to list their prices without credit card fees included. They do make it clear that there is an additional *% fee for using a credit card. We have always just included it in our rate, but we are taking a look at this. We already add on the sales and room taxes onto the advertised price.
Is anyone using this strategy?
Has it worked for you?
Has it reduced your credit card fees?
Are guests okay with it?

 

[scrambled_eggs]

I thought that I heard somewhere that it was illegal to charge an extra free for guests that want to use a credit card and that it had to be added into the room rate. That is just what I ready somewhere but I might be wrong. Anyone else know?

 

[Morticia]

I would be VERY wary of charging cc users an 'additional' fee to use the credit card. I think it's ok to offer a discount for cash, but NOT ok to raise the stated price because someone uses a cc. That should be stated somewhere in your merchant agreement, if you can read that tiny print!
So, example here...if you publish your room rate at $100, you can give the cash-paying guest a $5 discount, but you cannot charge the cc using guest $105.
Funny thing is, that guests who want a cash discount want a $10-$20 discount because they assume you are not paying taxes of any kind on the money and they want the money you would clear. So, even if you don't claim cash payments, you don't amke anything, you probably LOSE money!
I'm happy to take cash, at full value, no discounts. I expressly state that in my confirmation. 'Cash appreciated.' Relatively few guests pay cash. As JBJ says, why would they pay me cash when they get bonuses for using their cc? And they get zip from me!
Just assume cc and make your rate cover it.

 

[JunieBJones (JBJ)]

It is illegal to charge more to use a credit card (altho I see it often enough!) You can try to DISCOUNT FOR CASH. I know people who do trade shows who do this every time and all over the country.
But overall you are still not able to offer something better for a non card holder.

 

[JunieBJones (JBJ)]

"Cash gladly accepted with proper id"
Bree weren't you the one who had tried to book an Inn who charged MORE for booking online? That was amazing.

 

[Copperhead]

I too have heard you can not charge a 'fee' to the credit card user, nor can you only accept cards that are not award cards (not that you can tell anymore) if you take Visa - you must accept all Visa cards.
My question is ... how do others do it and not have problems?.... We just made a large purchase over the phone and had to put down a $500 deposit - if I used a credit card, they wanted a 5% processing fee. Another example is our county sheriff's dept. - you can pay your property tax or sales tax on line or in person and use a credit card but - yes you are right they have a processing fee for all credit card transactions. Now if it IS illegal, how are they getting away with it?
If you are really interested in doing this and all that fine print is giving you a headache. call your processor and ask... Also ask where in your paperwork it can be found so you can highlight it for the future. If they say you can, ask them to send you a statement in the mail. This issue has been discussed in several threads lately and have asked my webmaster (DH) to place 'cash is appreciated' on our site too. Since the economy shift late last year, I have gotten more cash than usual which I attribute to people wanting to keep a handle on their spending.

 

[Morticia]

"Cash gladly accepted with proper id"
Bree weren't you the one who had tried to book an Inn who charged MORE for booking online? That was amazing..

"Cash gladly accepted with proper id"
Bree weren't you the one who had tried to book an Inn who charged MORE for booking online? That was amazing.

Yes, the inn charged a 15% online booking fee. Hold on, I'll see if they're still doing that.
OK, now it's an $8.50 "convenience" fee.
So, you give a discount to save you the aggro, and they charge a fee. They use one of those big GDS systems and they are trying to recoup the fees, as far as I can see.

 

[Morticia]

I too have heard you can not charge a 'fee' to the credit card user, nor can you only accept cards that are not award cards (not that you can tell anymore) if you take Visa - you must accept all Visa cards.
My question is ... how do others do it and not have problems?.... We just made a large purchase over the phone and had to put down a $500 deposit - if I used a credit card, they wanted a 5% processing fee. Another example is our county sheriff's dept. - you can pay your property tax or sales tax on line or in person and use a credit card but - yes you are right they have a processing fee for all credit card transactions. Now if it IS illegal, how are they getting away with it?
If you are really interested in doing this and all that fine print is giving you a headache. call your processor and ask... Also ask where in your paperwork it can be found so you can highlight it for the future. If they say you can, ask them to send you a statement in the mail. This issue has been discussed in several threads lately and have asked my webmaster (DH) to place 'cash is appreciated' on our site too. Since the economy shift late last year, I have gotten more cash than usual which I attribute to people wanting to keep a handle on their spending..

I too have heard you can not charge a 'fee' to the credit card user, nor can you only accept cards that are not award cards (not that you can tell anymore) if you take Visa - you must accept all Visa cards.
My question is ... how do others do it and not have problems?.... We just made a large purchase over the phone and had to put down a $500 deposit - if I used a credit card, they wanted a 5% processing fee. Another example is our county sheriff's dept. - you can pay your property tax or sales tax on line or in person and use a credit card but - yes you are right they have a processing fee for all credit card transactions. Now if it IS illegal, how are they getting away with it?
If you are really interested in doing this and all that fine print is giving you a headache. call your processor and ask... Also ask where in your paperwork it can be found so you can highlight it for the future. If they say you can, ask them to send you a statement in the mail. This issue has been discussed in several threads lately and have asked my webmaster (DH) to place 'cash is appreciated' on our site too. Since the economy shift late last year, I have gotten more cash than usual which I attribute to people wanting to keep a handle on their spending.

In the case of a company charging me a fee to use a cc, I would call MY cc issuer and complain. That's how that gets stopped. Our CVB did the same thing. Pay via cc and you got charged 4% more to do so. I don't know if anyone took them up on that little scheme or not. (In the case of this particular scheme, they were charging anywhere from $40-$100 more to use your cc.)

 

[gillumhouse]

I have always stated on my web site and in my brochures and in my confirmation letters that we accept cash and personal checks. I have never had a bad check. May it stay that way. I kept getting line busy last week when my funeral people were checking out so I just gave them an invoice. Check came yesterday! No fees!!

 

[swirt]

It is not so much illegal (there is no law against charging more) but in most cases it is against the contract you enter with when using the cc processor. So it is a breach of that contract.

 

[JBanczak]

One easy way to find out if your rates are good or not is to look at the last few months - add up every dollar you have charged, and add up every single dollar you have spent on credit card fees. The monthly statement, any and all transaction fees, any annual fee you might pay, insurance, etc.
All those fees total should be somewhere near 2.5% of the gross dollar amount charged. If you are much higher than that, chances are you can get the number down if you use a lodging certified credit card processor, that handles true swiped transactions. I don't believe Costco is lodging certified, as many are not. Maybe they will as all the PCI compliance starts to take shape, but don't think they are now.

 

[happykeeper]

One easy way to find out if your rates are good or not is to look at the last few months - add up every dollar you have charged, and add up every single dollar you have spent on credit card fees. The monthly statement, any and all transaction fees, any annual fee you might pay, insurance, etc.
All those fees total should be somewhere near 2.5% of the gross dollar amount charged. If you are much higher than that, chances are you can get the number down if you use a lodging certified credit card processor, that handles true swiped transactions. I don't believe Costco is lodging certified, as many are not. Maybe they will as all the PCI compliance starts to take shape, but don't think they are now..

I think the credit company Used to be called NOVA and now has a different name.

 

[JBanczak]

One easy way to find out if your rates are good or not is to look at the last few months - add up every dollar you have charged, and add up every single dollar you have spent on credit card fees. The monthly statement, any and all transaction fees, any annual fee you might pay, insurance, etc.
All those fees total should be somewhere near 2.5% of the gross dollar amount charged. If you are much higher than that, chances are you can get the number down if you use a lodging certified credit card processor, that handles true swiped transactions. I don't believe Costco is lodging certified, as many are not. Maybe they will as all the PCI compliance starts to take shape, but don't think they are now..

I think the credit company Used to be called NOVA and now has a different name.
.

I think the credit company Used to be called NOVA and now has a different name.

Nova is now called Evalon. I do not know if they provide a lodging certified product or not. Do you have to pre-authorize when a gets shows up, charge on day of departure? Or is there a way to enter in these dates?

 

[Morticia]

One easy way to find out if your rates are good or not is to look at the last few months - add up every dollar you have charged, and add up every single dollar you have spent on credit card fees. The monthly statement, any and all transaction fees, any annual fee you might pay, insurance, etc.
All those fees total should be somewhere near 2.5% of the gross dollar amount charged. If you are much higher than that, chances are you can get the number down if you use a lodging certified credit card processor, that handles true swiped transactions. I don't believe Costco is lodging certified, as many are not. Maybe they will as all the PCI compliance starts to take shape, but don't think they are now..

I have a lodging certified processor. Last month fees were 2.8%. A lot of that is international processing and AmEx, which are thru the roof. I've called AmEx to see if I could get a better rate given we do about 40% of our business thru guests who use AmEx. I was told we give AmEx too much business to get a lower rate. Whadda ya know.

 

[mooseberry]

I thought that I heard somewhere that it was illegal to charge an extra free for guests that want to use a credit card and that it had to be added into the room rate. That is just what I ready somewhere but I might be wrong. Anyone else know?.

I thought that I heard somewhere that it was illegal to charge an extra free for guests that want to use a credit card and that it had to be added into the room rate. That is just what I ready somewhere but I might be wrong. Anyone else know?

Yes Oceans, we have the same here.
Many people have a sign stating that there must be a $10.00 minimum purchase for CC's and that is illegal.
CC's are used the same as cash tender and Banks will pull your account or fine you if you do this.
One never has to mention that the fees are extra, just automatically include them in your rate.

 

[happykeeper]

One easy way to find out if your rates are good or not is to look at the last few months - add up every dollar you have charged, and add up every single dollar you have spent on credit card fees. The monthly statement, any and all transaction fees, any annual fee you might pay, insurance, etc.
All those fees total should be somewhere near 2.5% of the gross dollar amount charged. If you are much higher than that, chances are you can get the number down if you use a lodging certified credit card processor, that handles true swiped transactions. I don't believe Costco is lodging certified, as many are not. Maybe they will as all the PCI compliance starts to take shape, but don't think they are now..

I think the credit company Used to be called NOVA and now has a different name.
.

I think the credit company Used to be called NOVA and now has a different name.

Nova is now called Evalon. I do not know if they provide a lodging certified product or not. Do you have to pre-authorize when a gets shows up, charge on day of departure? Or is there a way to enter in these dates?
.

We have to do a check-in check out and it is a lodging specific program. Since they do gazillions of business, I assume they will be able to comply as needed. I imagine your positioning will provide you a distinct advantage against any small time rez apps that can't marshall the resources to comply when the compliance shoe you've been talking about drops.

 

[Morticia]

I thought that I heard somewhere that it was illegal to charge an extra free for guests that want to use a credit card and that it had to be added into the room rate. That is just what I ready somewhere but I might be wrong. Anyone else know?.

I thought that I heard somewhere that it was illegal to charge an extra free for guests that want to use a credit card and that it had to be added into the room rate. That is just what I ready somewhere but I might be wrong. Anyone else know?

Yes Oceans, we have the same here.
Many people have a sign stating that there must be a $10.00 minimum purchase for CC's and that is illegal.
CC's are used the same as cash tender and Banks will pull your account or fine you if you do this.
One never has to mention that the fees are extra, just automatically include them in your rate.
.

We get a lot of girlfriends traveling together and they want to split the bill 4 ways. So, that's 4 cc processings for the same $200 room charge. 4 phone calls into the processor (via the machine), 4 checks on the cc (another fee), 4 different discount rates. So, what might have cost me $4, now has cost me $6 for the same one room night.
I like the ones who whip out the cc and say to the other friends, 'I'll pay, you all give me cash I can spend!' They look at it as having a 'free' $150 to spend.