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Level 2

How do I set up an invoice so that it passes the credit card fee along to the customer if they choose to pay with card?

I want to only charge the customer the credit card fee if they decide to pay with card, but not if they decide to mail the payment or pay with a bank transfer. So, I don't want the credit card fee to show up in the invoice, but I do want the invoice to note that a service fee will be added for transactions paid with card, and then automatically add that service fee if they click to pay with card. 

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Best answer 10-15-2018

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Level 6

First of all there’s no automatic way to do this. You cou...

First of all there’s no automatic way to do this. You could add the verbiage to your invoice template.


You should also check the state laws to be sure that this is legal in your state.


Why not just only check off the ACH method when you send an invoice. Then when the customer decides they want to use a credit card you can resend the invoice with a credit card link checked off.   At that point, you can let them know there’s an additional fee. But again check with your state to be sure it’s legal

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13 Comments
Level 6

First of all there’s no automatic way to do this. You cou...

First of all there’s no automatic way to do this. You could add the verbiage to your invoice template.


You should also check the state laws to be sure that this is legal in your state.


Why not just only check off the ACH method when you send an invoice. Then when the customer decides they want to use a credit card you can resend the invoice with a credit card link checked off.   At that point, you can let them know there’s an additional fee. But again check with your state to be sure it’s legal

View solution in original post

Level 2

Well, I am hoping to automate more processes as my busine...

Well, I am hoping to automate more processes as my business is picking up. Maybe credit card fees isn't the right way to state it. I'm getting Paypal fees, and it's a percentage of the charge, so it can sometimes be a pretty significant amount of money if a client pays with Paypal. Does Quickbooks have a deal that gets a flat fee for Paypal transactions instead of a percentage? I heard Freshbooks has something like this for their customers. Or is there some other way to add the Paypal fee? Or maybe a better way to take card payments that doesn't charge a percentage fee? @Lynda
Level 1

Lynda...you're a genius!!

Lynda...you're a genius!!
Level 2

The way to get around Credit Card fees is to give a disco...

The way to get around Credit Card fees is to give a discount for cash or check payments. Say you sell something and you want to make at least $95 off of it. Sell it for $100 or pay by cash or check, pay $95. There is nothing wrong with doing that and it is legal in every state.
Level 1

PCMD, cash discounts are NOT legal in NY.

PCMD, cash discounts are NOT legal in NY.
Level 2

Mitchell Katz, spokesman for the Federal Trade Commission...

Mitchell Katz, spokesman for the Federal Trade Commission, said: "it's illegal for a merchant to charge more if a customer pays with a credit card, but OK if the merchant offers a discount for cash."

The Dodd-Frank law prohibits a payment card network such as Visa from inhibiting the ability of anyone to provide a discount for payment by cash, checks, debit cards, or credit cards. However, some states prohibit charging an extra fee for using a credit card. That means a store can't list the price of something as $50, and charge $55 if payment is made with a credit card. Thats why you sell it for $55 and give a discount if paying with cash or check - which IS legal according to the FTC.

As for why stores don't offer cash discounts, most stores have already built credit card and debit card fees into their prices, because more transactions are paid with plastic than cash or checks. If someone does pay in cash, that would mean many merchants would get a little bit of extra profit.

As far as NY is concerned, well, it's NY. But to add to this me and my wife recently went to NY for vacation and in many of the shops we went into, the clerk asked how we were paying. I bought a $18 hat for $15 when I payed with cash so theres that.
Level 6

theres really no way to automate this process. You cannot...

theres really no way to automate this process. You cannot add a percentage to the above item line to an invoice in qbo.  You can create a discount item but that won’t add to the total.

So that being said, you could invoice for the total including the credit card charge and offer the discount line if they pay in cash/check, etc.  

It’s very complicated to do what you want to do in QBO.  I suggest you upcharge your rates so you cover the overhead of credit card fees all around.  The way you are doing this (unless you do as suggested and send out the invoice with the ACH only checked off and re-invoice with the cc fees if they request it.  I find it would make a potential customer annoyed if they see the two prices.

Level 1

I am trying to figure out the same thing. Yes, you can ca...

I am trying to figure out the same thing. Yes, you can calculate the 3% and add it to the bottom line but all that does is increase the total dollar amount being charged and therefore increasing the amount that the card company will in turn charge me.... Is there a way to separate out these charges so that the card company is only charging the fees based on the subtotal of the invoice?
Intuit

Re: How do I set up an invoice so that it passes the credit card fee along to the customer if they choose to pay with card?

Hello,

 

Something I haven't seen anyone bring up also.  (Unless I just missed it)

 

Whether it be QuickBooks Payments, or PayPal, or anyone.  If you're wanting to recoup the fee that you're being charged... by adding a fee to the total amount of the charge, isn't the fee going to increase again anyway? So you end up paying a HIGHER fee?

 

Ex:

You sell a $100 item.  You're charged 5% so you're charged $5.  You charge 105 for the item instead of 100.  NOW your fee would be 5.25.

 

 

Level 1

Re: The way to get around Credit Card fees is to give a disco...

This is absolutely the CORRECT way to do it.  I work in the credit card processing industry.  And this way of "cash discounting" is legal in all 50 states.  Any other way is considered a surcharge.

Level 1

Re: The way to get around Credit Card fees is to give a disco...

After ready through this thread, it is quite ridiculous that systems (like QuickBooks) do not have a way to deal with this. We just had to send notice to customers that a processing fee will be passed alone for cards (credit/ debit). Cash discounts are messy- specifically for franchises. It's as simple as adding a percentage. Hard to understand why this cannot be automated.

 

We already pay royalties, which follow the same principle as adding to the price, but raising it at the same time. AT LEAST most of the cost is being recouped. It would be the same for automating fees.

 

We are hoping most move to ACH (for paperless). Many will send a paper check. If we charge 2%, at least we can recoup 50%+ of the fee!

QuickBooks Team

Re: The way to get around Credit Card fees is to give a disco...

Hey @GGFranchiseOwner,

 

This isn't the way we want you to see QuickBooks. We want you to see it as a product where you can improve your business.

 

As mentioned above, there isn't a way to achieve this. But you can add the fees on your customer's invoices as an alternative.

 

Before you can add the charge the fees to your customer, you can get in touch with them and know beforehand their method in paying the invoice. This way, you can add the charge on their invoice.

 

Also, I suggest contacting our Merchant Services team so they can provide more options about how to achieve this.

 

You can contact them by following these steps:

  1. Go to this link: https://help.quickbooks.intuit.com/en_US/contact.
  2. Choose your product.
  3. Select/enter a topic.

You can also visit our Help Articles page if you want to learn more "How do I" steps in QuickBooks.

 

Please let me know if you need help with anything else.

Intuit

Re: The way to get around Credit Card fees is to give a disco...

Also be carful.  The laws for charging a surcharge to your customers for using a debit/credit card vary from state to state.  As part of the Intuit Merchant Agreement.  

 

"3. No Surcharge. You agree not to charge your customers increased fees, surcharges, or any other premiums for a Gift Card transaction, for a customer's use of a POS terminal, or for the operation of the system unless such surcharges are permitted by applicable laws or regulations."

 

 

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