Two issues regularly come up when I speak with businesses that accept credit cards: return policies and charging more for credit than for cash payments. Both of these questions are addressed in the merchant agreement that you completed with your credit card processor.
If you accept payment for goods or services via credit card and you have a specific return policy, your policy must be stated on the sales draft within close proximity to the signature prior to the consumer signing the sales slip.
If you use an electronic printer, your merchant services help desk can arrange to have the appropriate language programmed.
If you choose to accept a return after you have processed a sale, you should process a “credit” through your terminal, using the same credit or debit card that was used at the time of purchase. In this way you maintain the “paper trail” in case the customer attempts to dispute the original transaction.
If you have issued a cash refund and the customer then contacts the card-issuing organization, you may face a chargeback because you would not be able to document that you have issued a refund.
I’m frequently asked “can I charge a fee to a customer who wishes to pay with a credit card?” The short answer is no. All card-processing agreements prohibit a surcharge on credit card transactions.
Merchants are allowed to offer a cash discount, however. The distinction is this: the published price (in ads, on signage and on price tags) must be the price charged for credit transactions.
Selected industries are allowed to collect a “convenience fee” for payments. Convenience fee rules were designed to allow government entities to accept cards for things like property taxes and other fees.
John Mayleben is Michigan Retailers Association senior vice president, technology and product development, and a national expert on electronic payment processing.