What is surcharging?

Surcharging is the practice of adding a fee to a credit card transaction to recover payment processing costs. Surcharging legality varies significantly by state, and regulations are constantly evolving. It is also subject to strict rules by Visa, Mastercard, and other card networks.

 

Will surcharging cover all my fees? Is there a limit to how much I can surcharge?

No. Surcharging only covers the cost of acceptance for a credit card transaction, and can be subject to additional caps set by state laws or regulations, or card networks themselves.

 

Will the surcharge be applied to the taxed amount or the pre-tax amount?

The surcharge is applied to the taxed amount.

 

Can I surcharge a debit card or prepaid gift card?

No. Debit and prepaid cards cannot be surcharged, even if processed as credit.

 

Can I surcharge debit transactions that do not utilize a PIN? 

No. Debit cards cannot be surcharged, with or without a PIN. 

 

Can I surcharge CareCredit transactions?

No. CareCredit is classified as a promotional financing product and cannot be surcharged.

 

Can I apply a different surcharge percentage to different transactions?

No. The same percentage must be applied to all credit card transactions.

 

Can I apply a surcharge only on selected services or items?

No. A surcharge is applied to the entire transaction whether it is online or in person.

 

Is surcharging right for my practice?

Surcharging can help merchants reduce their expenses by offsetting credit card processing fees. However, it may not be a good fit for some practices because surcharging passes credit card processing fees to pet owners, effectively increasing prices. Pet owners may choose to buy products outside the practice to avoid the surcharge. 

Please read our blog post, which addresses this question in more detail.

Surcharging legality varies significantly by state, and regulations are constantly evolving. It is also subject to strict rules by Visa, Mastercard, and other card networks. Failure to follow these rules could result in fines for the practice. Some states prohibit surcharging or apply additional requirements.

 

How can I find out if surcharging is legal in my state?

Surcharging is not universally permitted and is subject to strict rules by card networks and evolving state laws and regulations. You can find out your state's surcharging laws by checking official state government websites or consulting a legal expert. 

 

Does the surcharge apply to the transaction before or after a sales tax is applied?

The surcharge is applied to the total amount of the transaction, with the sales tax included.

 

 Are surcharges subject to sales tax? 

In many states, if a credit card transaction is taxable, the surcharge is also taxable. All practices who want to implement surcharging should contact their tax consultants with any questions. 

 

Do I have to use integrated payments to surcharge? 

While many payment processors can support surcharging, it is important to use authorized payment integrations to ensure seamless processing, especially when it comes to refund processing, and to ensure accurate reconciliation. 

 

How can I get surcharging enabled for my practice?

Please complete the contact form at the bottom of this page.

 

How does this impact refunds?

When refunds occur, surcharges will be automatically calculated and will appear in your reports accordingly. 

 

When I surcharge, where/who does that money go to?

The surcharge fee pays your credit card processing fees, so it is netted when payouts are made according to your normal payout schedule.

 

Do I have to inform pet owners that I am surcharging?

Yes, the practice must inform pet owners. This includes signage at your entrance and checkout area. For examples of signage visit Visa.

Important: State requirements vary and are constantly evolving; please review your specific state requirements.

 

How will pet owners paying online be informed that I am surcharging?

The payment page will automatically display the appropriate information to inform the pet owner of any applicable surcharge.

 

Can all my devices surcharge?

Existing IDEXX Payments customers can use their authorized devices except the Ingenico iSMP4.

 

Will my processing pricing change if I surcharge? 

Yes. You will need to sign an addendum which includes updated pricing. The change will reflect a specific surcharging rate for eligible transactions that will be offset by your surcharging. 

 

What is the difference between surcharging and cash discounts?

While surcharging collects a fee to cover the cost of processing certain transactions, cash discounts charge less when the client pays in cash.  Please refer to your state laws and regulations and review card brand regulations.

 

What is the difference between a surcharge and a convenience fee?

A surcharge can be applied to all credit card transactions, card present or card-not-present, up to 3% of the total sale. A convenience fee is typically a flat fee charged to offer a non-standard payment channel as a convenience for customers. It cannot be charged in face-to-face transactions. IDEXX does not offer guidance for convenience fees or similar fees that you may assess  pet owners. Please refer to your state laws and regulations and review card brand regulations.

 

What if I start surcharging then find it is not right for my practice? 

Should you implement surcharging and find it is not a good fit for your practice, you can discontinue and revert to your previous pricing.  

 

Who can I contact if I have additional questions?

Please complete the contact form at the bottom of this page. 

 
DISCLAIMER: THE INFORMATION CONTAINED IN THIS FAQ IS PROVIDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. THIS DOCUMENT IS NOT INTENDED TO BE A COMPREHENSIVE OR AUTHORITATIVE SOURCE OF LEGAL INFORMATION AND SHOULD NOT BE RELIED UPON AS SUCH. THE DOCUMENT MAY CONTAIN ERRORS, OMISSIONS, OR INACCURACIES AND MAY NOT REFLECT THE MOST CURRENT LEGAL DEVELOPMENTS. READERS ARE ADVISED TO CONSULT WITH A QUALIFIED LEGAL PROFESSIONAL BEFORE TAKING ANY ACTION BASED ON THE INFORMATION IN THIS DOCUMENT.