For many vendors, especially small businesses, taking credit cards for payment from debtors continues to be wildly unpopular because of fees associated with their use. However, a 2010 Credit Congress panel said there are some ways to circumvent losing profits to interchange and swipe fees.

Panelists in a May 19 session titled "The Inevitable Change--A Panel Discussion of the Ever-Changing Payments Environment," noted it can be legal to implement some "convenience fees" as long as it's worded as such and a consistent practice for all customers. Tom Sacher, CCE, CEW, of Watsco Inc., warned attendees the fee cannot in any way be referred to as a surcharge.

Such convenience fees are becoming more popular -- They're common with universities and government agencies including the Internal Revenue Service. But that doesn't mean the credit card companies are encouraging this out of small businesses, and they've set up lengthy sets of rules at Mastercard and Visa to discourage the practice.

"There are a lot of hurdles," said Sacher. "I would caution you about doing it on an informal basis. Mastercard and Visa do not like it and set up hurdles. It has to be a bona fide convenience outside of normal means of payment...You can't do it for some and not others."

Additional, a small business has to change a flat fee for such a convenience charge, not by percentage, regardless of how large the purchase is. However, if your business can't get through the laundry list of qualifications to charge such convenience fees, it is allowable to instead provide a discount for those using cash, a la gas stations, and/or simply pay attention to a debtors' payment patterns and adjust their pricing on the actual goods accordingly.

"We have customers set up on a pricing basis," said Barbara Condit, CCE, SPS Companies Inc. "We adjust our pricing to cover the fees we're going to be absorbing. We get our money back."

Brian Shappell, NACM staff writer

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