What is a Convenience Fee?
A convenience fee is a flat, fixed fee that you add to your sales for the convenience of paying via an easier manner. Convenience fees must be fixed dollar amounts, not a percentage of the sale.
A convenience fee is just like it sounds, it’s a fee added for the convenience of your chosen payment method. It is typically a fixed, flat fee, and it’s charged to consumers for the convenience of using a specified payment method. For example, you may be able to make an order online rather than traveling to the store, so the store will charge a convenience fee for their online purchases or phone orders. Importantly, convenience fees are able to be avoided by customers, if they pay in another manner. Often, a convenience fee is associated with online purchases. Unlike surcharging, a convenience fee is not allowed to be a percentage of the purchase price, and must remain a static charge for the convenience of the optional payment method.
Common convenience fees would be for:
Paying electronically online (where you could go to the local office and pay by cash/check)
Phone payments (when you could mail in your payment)
It is important to bear in mind that you can ONLY charge a fixed value, and convenience fees are only allowable if you give your customers alternate avenues to pay with the same payment format. You can charge a convenience fee on credit cards online if your customer can come into the shop and pay in-person. You cannot charge a convenience fee for credit cards online if you choose to NOT to allow your customers to pay some other way. So if customers can mail in checks (and avoid a convenience fee) then you’re welcome to charge convenience fees through your online portal, where you accept ACH/credit payments. Connect with our experts to learn more about this zero-cost processing strategy.
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