Credit Card Convenience Fee Wording: Some Useful Scripts and Templates for Small Businesses

Credit Card Convenience Fee Wording: Some Useful Scripts and Templates for Small Businesses

The world may prefer cards, but for many merchants, the fees for accepting them eat into critical profit margins. Sadly, cash use is down year on year, and no credit card transaction is free. In 2021, cash payments accounted for 20% of all transactions, falling 6% from 2019.

Credit Card Convenience Fee Wording_Cash Payments_Infographic

But it’s not consumers who automatically pay that price. For the most part, business owners shoulder the brunt of credit card processing costs.

Some large retailers have the negotiating power to demand lower fees from banks and card networks. But for small businesses, credit card processing fees are often non-negotiable.

The good news is that if you must accept credit card purchases, you do have a way to offset the costs. You can charge a convenience fee. This post offers credit card convenience fee wording suggestions and tips to help you communicate your policies to customers.

What Is a Credit Card Convenience Fee?

Convenience fees are charges that businesses may add to a customer’s purchase for the privilege of letting them pay using a non-standard (or alternate) payment method. For example, if in-person payments are the norm for a business, they may charge a convenience fee to customers who pay online or over the phone.

When you charge a convenience fee, you’re essentially trying to pass along the processing costs associated with accepting credit cards (and other non-standard forms of payment) to your customers.

Note that convenience fees are not the same as credit card surcharges or service fees. A surcharge is a convenience fee specifically meant to cover the costs associated with a credit card transaction, while a service fee is restricted to only certain types of government or education merchants.

Rules for Implementing Convenience Fees

The specific requirements for convenience fees can differ across card brands, but three rules are consistent in each location.

Charge limits

All credit card brands—Visa, Mastercard, American Express, Discover, etc.—have slightly different rules around how much you can charge. However, the convenience fee must always be a fixed amount and not a percentage of the transaction value.

Credit Card Convenience Fee Wording_Convenience Fee Value_Infographic

Review your state laws and your card issuers’ requirements and ensure you abide by their guidelines.

Customer notification

You must clearly and conspicuously notify your customers that convenience charge fees will be applied before they complete their purchase. All of the credit card companies will have guidelines on how this has to be communicated, including ample signage in-store and near the point of sale.

The notification must include:

  • The amount of the fee
  • That the fee is for the use of an alternate payment method
  • The type of payment methods to which the fee applies.

Itemized billing

You must disclose the convenience fee to customers before they complete a purchase and include the total dollar amount as a separate line item on their receipt or invoice. The customer should never be surprised by the fee. Furthermore, they should be allowed to cancel the payment and pay via a different method if they so wish.

How to Notify Customers about Convenience Fees

For customers, these additional charges can seem unfair and confusing. That’s why communication is so important. Here are three scripts you may want to use to notify your customers about an upcoming convenience fee:

In-person: “There will be a $3 flat fee for online payments and credit cards. Would you like to use cash or another form of payment?”

Online: “By selecting ‘credit,’ you agree to pay a $3 convenience fee.”

Over the phone: “I’m happy to process your credit card payment, but please be aware there is a $3 convenience fee.”

The key is to be transparent about the fee and deliver the information confidently. If customers have any queries, you can explain why it’s being charged (e.g., you’re a small business, and you need to offset the fees). 

You should also give the customer a chance to use another form of payment if they object to the fee. For example: “If you would prefer to use another form of payment, such as cash or debit, this fee would not apply.”

If you wish to put up your own signs in store, they could read something like:

Notice: A $3 flat fee applies when using a credit card for payment. Cash and debit cards are accepted without this fee.”

Again, be sure to follow your state’s guidelines around sign placement and visibility.

The Bottom Line

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Charging a convenience fee is one way to offset the high costs of credit card acceptance, but it’s not the only way. You can also review your current payment processing agreement to see if you’re being overcharged and consider switching to a more affordable payment processor.

Payment Depot offers transparent and affordable credit card processing fees. We have no hidden costs and don’t mark up interchange rates like other merchant service providers. To see how much you could be saving, contact Payment Depot today.


How do convenience fees differ from credit card surcharges?

Surcharge fees

Credit card surcharges are an additional fee—above your regular price—that you charge customers for using a credit card. So, if your product costs $100 and has a 4% surcharge, the cardholder would be charged $104 if paying by credit card. The increased transaction amount is pre-programmed into your point of sale system and unable to be altered.

Surcharge rules also vary by state. For example, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas don’t allow merchants to add surcharges.

Convenience fees

Convenience fees, on the other hand, are optional charges that you can add to the total purchase price if someone pays using a non-standard payment method. So, if your product costs $100 and has a $3 convenience fee, the customer would still be charged $100 if they choose standard payment options, such as cash, ACH, prepaid, or debit card.

Are convenience fees legal in all states?

As mentioned above, surcharge fees are illegal in some states, but convenience fees are not. This is because convenience fees are not added to the product’s regular price. It’s a reasonable offer to the cardholder that clearly reflects that the fee is not to make extra money. It’s merely a way to encourage another payment channel to offset or avoid the card processing charge.

Can I charge a convenience fee for online purchases?

Yes. You can charge a convenience fee for any type of purchase, including in-store, over the phone, and online.

Can I charge a convenience fee for all credit card transactions?

You can only charge a convenience fee if the cardholder is using a credit card and if they have been given the option to use another payment method, such as cash or debit.

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