Did you catch Jon at the latest More Than Just Great Dancing conference in Florida recently? There was lots of discussion around the new feature in The Studio Director which allows you to automatically add a surcharge to families that pay via credit card! Implementing a surcharge can help offset some of your cost with taking credit card payments for your dance or gymnastics studio. With our new feature, you define the surcharge and The Studio Director will apply it for you!
What do you do if you want to place a surcharge?
Keep in mind that there are rules in place surrounding having a surcharge. Here are just a few:
- Merchants can surcharge up to their cost and are capped at 4%. This means that you cannot place a surcharge that is more than 4% of the transaction.
- Merchants will be required to disclose their surcharge policy at the point of store entry and the point of sale prior to the purchase transaction being completed. This means that you have to let your customers know that you are placing a surcharge on any credit card transaction.
- There are currently 11 states that prohibit or restrict placing a surcharge for a credit card transaction. You should ALWAYS check your state laws to determine how they may impact your ability to place a surcharge.
Contact your current merchant provider for more details on applying surcharges. They can review all the rules that you need to follow.
How do you define the surcharge? Within The Studio Director, you simply define the surcharge under the Admin tab in the Manage Credit Card Payments section. THAT’S IT!!! Once you have the surcharge defined, it will be automatically calculated and added to the family ledgers whenever a credit card transaction is processed.
Are there any downsides to applying a surcharge?
Possibly. Applying a surcharge can be an incentive for families to pay via cash or check at the studio. Instead of making an on-line payment or enrolling in the recurring payment plan, families would rather pay at the studio so they can avoid the surcharge. This creates extra work for you! Getting your families all on the recurring payment plan can be a HUGE timesaver. No more tracking down lost/bad checks. No more placing late fees when families do not pay on time. You get everyone on recurring payments and all of your tuition is paid on time!
Is there a middle ground? Consider adding the ability to take electronic check payments (also known as EFT or ACH payments). EFT/ACH transactions just charge a small fixed fee – not a percentage of the sale. This allows your parents to continue to pay on-line and enroll in the recurring payment plan, thus keeping your staff free. But it also provides your families with a way to avoid paying the surcharge.
What if you want to offer a discount for paying by credit card instead?
You can easily do this with our new feature as well! Simply add the “surcharge” as a discount instead of an additional charge. Why might you want to offer a discount? This would be further incentive for families to enroll in the recurring payment plan.
As always, if you have questions about how to implement our new feature, you can contact us and we will be more than happy to assist you.