Merchants can feel intimidated by the rules laid out by Visa. The Visa Core Rules and Visa Product and Service Rules public document is 930 pages long, and merchants may decide they’re too difficult to comply with. Additionally, if they aren’t following the rules to the letter, a secret shopper visiting their stores could report back to Visa, and merchants will face fines or penalties.
As a trusted advisor, you can help put your clients’ minds at ease by educating them on cash discount and credit card surcharge rules and providing them with technology that allows them to manage these programs compliantly.
What A Secret Shopper Looks For
The most common mistakes that merchants make with cash discounts or credit card surcharges and that raise red flags for secret shoppers include:
- Surcharging Ineligible Cards
Debit cards (even those run as credit) and pre-paid cards are not eligible for surcharging. The challenge is educating employees about this rule so they can ensure they’re only applying surcharges to credit cards. A solution that identifies the card type and enforces policies will overcome this challenge.
- Setting Minimum Transaction Amounts
When merchants consider the time, effort, and expense associated with accepting payment cards, they may decide to set a minimum amount for this payment method. While Visa permits merchants to require a customer to spend a certain amount to be able to pay with a credit card, the minimum amount set must not exceed $10.
- Setting Maximum Purchase Amounts
Retailers cannot set a maximum transaction amount for credit card purchases.
- Exceeding the Surcharge Amount
Credit card surcharging cannot exceed 3 percent of the transaction. Depending on the payment processing fees the merchant pays, this may cover all of those charges—or it may not.
- Confusing a Discount with a Surcharge
Educating your clients on the fundamentals is important. A discount is just that. It is less an amount of the ticketed price. A surcharge is an added charge when a customer uses a credit card. Talk strategy with your clients on how to control payment processing costs with these options while messaging them correctly and compliantly.
- Making Proper Disclosures
Whether offering a cash discount or assessing a credit card surcharge, merchants must make proper disclosures at the door of their brick-and-mortar facility and at the point of sale. For online merchants, disclosures must be present on the first page referencing the credit card brands that the merchant accepts and on the checkout page. When using unattended payments, disclosures must be at the main entrance to the facility and on the self-checkout terminal. Additionally, a compliant tech solution can help them format receipts properly and keep accurate records for accounting.
Why Your Clients Don’t Need to Worry
Encountering a secret shopper doesn’t have to be a cause for worry for your clients. After all, as a partner invested in their business, you are available to provide them with guidance and expertise. Consulting with your clients and helping them choose the right technology to manage cash discounting and surcharging compliantly will provide them with a solid foundation for their programs.
You can also reassure your clients that they don’t have to be put off by the evolving nature of cash discount and credit card surcharge rules, such as the latest update on April 14, 2023, which updated requirements for notifications to Visa and the merchant’s acquiring bank. Your clients may be concerned that they don’t have the bandwidth and resources to stay informed of changes—but you can provide them with the information they need.
Turn to the Experts
To provide the most accurate information to your clients, your team may need advice and information on credit card surcharges and cash discounts set by Visa and the states where your clients do business.
Don’t be afraid to reach out to Visa, regulators, and your payment partners for a clear understanding of rules and how to tailor “secret-shopper-proof” programs to specific industry segments, from retail and grocery to restaurant and other merchants.
Contact us to learn more about Datacap Systems’ solutions for cash discounting and credit card surcharging.