Pass-Through Transaction Fees

Pass-Through Transaction Fees

Thinking about passing on a transaction or convenience fee to your customers to cover your credit card processing fees?

Note: The rules and laws on this vary from state-to-state and in many cases are governed by the agreement you hold with your credit card processor. Please consult your contracts and outside counsel to understand the implications and liabilities of doing this before enabling this functionality.

Also, see additional information and best practices on this topic below.

Video - Admin Payment Configuration




To set up Pass-Through Transaction Fees:  Go to Admin / Payment Configuration / Pass-Through Fees.
  1. Select "Yes" for "Collect a Transaction Fee for Each Payment?"
  2. Transaction Fee Label - What do you want to call the fee?
  3. Transaction Fee Method - Do you want to charge a flat amount or a percentage?
  4. Percentage of Payment Total - What percentage amount do you want to charge? (if you selected percentage above)
  5. Transaction Fee Flat Amount - Do you want to add an additional flat fee?
  6. Minimum Charge - What is the minimum amount you wish to charge? (if you selected percentage above)
  7. Maximum Charge - What is the maximum amount you wish to charge? (if you selected percentage above)
  8. Transaction Fee Income Account - Which Income Account would you like to use for collecting the fees?


Adding Transaction Fees At Check Out - Best Practices


Thinking about adding credit card transaction fees to your online sales? There are two things to consider:
  1. Is it legal in your state?
  2. Is it good for business? 

A good resource for credit card questions: Know Your Card (http://www.knowyourcard.org/)

New Rules That May Be Coming Under the proposed settlement:
  1. The surcharge cannot exceed the amount that the merchant actually pays to accept credit cards—typically between 1.5% and 3% of the transaction amount.
  2. Surcharges can be imposed only on credit card transactions, not on purchases made with debit cards.
  3. Merchants must disclose the credit card surcharge very clearly—at the store entry and the point of sale, or on the first webpage on which credit cards are mentioned if the merchant does business on the Internet.
  4. The disclosure must include the amount of the surcharge, the fact that the fee is being charged by the merchant (as opposed to the card issuer), and that the fee does not exceed the merchant’s cost to accept credit cards.
  5. The dollar amount of the surcharge must appear on the transaction receipt.

Even if it is legal in your state for merchants and organizations to include a transaction processing surcharge, we do not recommend doing so.
  1. If you are trying to increase membership, boost fundraising, increase donations….all of these goals are easier to reach if you make it easier for parents to participate and remove roadblocks.
  2. Parents may not be happy when they get to the checkout and find you have added 4.0% onto their bill.
  3. If you think of your PTA, PTO, or Booster Club as a small business, then it makes sense to price the items you are selling so that is covers your overhead. 

*For further information on this topic, view our blog: 21st Century Parent Organizations - Accepting Credit Cards

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