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View Full Version : Do you charge a processing fee onsite?



HauntedPaws
04-17-2012, 08:54 PM
Do you charge a processing fee onsite and if not are you forcing patrons to use a ATM?

mrfoos
04-17-2012, 09:58 PM
I hesitate to even mention this because first I don't really know what I'm talking about and second I don't want to hijack your thread into another topic but ... is it "legal" to do that? My understanding is the credit cards don't let you in general. Here is a topic discussion about it:

http://www.merchantcouncil.org/merchant-account/operation/convenience-fee.php

Having said that, I've seen SO many businesses do it anyway, there must not be much enforcement on it (assuming my assumption is correct) by the credit card companies.

Feel free to correct me... like I said, I don't really understand the rules myself. And because of that lack of understanding, we've never done it.

MrFoos

Wellinton
04-18-2012, 04:17 AM
If you are talking about adding a processing fee to cover your credit card merchant fees, it is a breach of your merchant credit card agreement. Someone using their credit card is suppose to pay the same as someone paying cash. If a cardholder decides to complain to their issuing bank, the "whole" transaction may be disputed and the cardholder would win.

HauntedPaws
04-18-2012, 08:25 AM
Ok I'll change the wording into convenience fee. Ticketmaster has changed fees in excess of 84% on a ticket. So let's say do you charge a convenience or processing fee?

BrotherMysterio
04-18-2012, 09:20 AM
Ok I'll change the wording into convenience fee. Ticketmaster has changed fees in excess of 84% on a ticket. So let's say do you charge a convenience or processing fee?

Ticketmaster is considered by some to be the antichrist, and is generally hated for their monopolistic practices, even to the point of some major bands selling tickets directly to their fans, outside of the TM machinery. If, however, the only way you can get Beyoncé, Brittney, Beiber, Black Eyed Peas, Black Sabbath, Broncos, or La Bohème tickets is thru Ticketmaster, then, sorry, you get to pay thru the nose for them, "convenience fee" and all, and often at some $200 a pop for the "good" seats. Such is the nature of tickets for big entertainment or sports events.

For your small event, on the other hand (as compared to a major big ticket affair), your patrons will most likely strongly object to your sticking it to them, even if it is only for $1 to $2 or whathaveyou. If you do that, you damage trust and good faith, and they will be more than happy to leave and go to the haunt down the street. I don't know what it's like in your area, but here in DFW, if I want to go to either of the two major Halloween theme parks, they are quite some distance, and I'll easily pass 3 to 4 haunts on the way. If I was operating a haunt in this area surrounded by countless competitors, then I wouldn't risk alienating my customers.

Also, consider this: that convenience fee isn't for a convenience to them . . . it's for a convenience to you. Why? Because the minute plastic enters the picture, the average spend per customer goes up substantially. I don't have any haunt-specific metrics on that, but that is true in virtually every other business. That's why so many businesses push for credit aps, offering prizes, bonuses, and other incentives to their employees to get them.

Why? Cuz, on average, a customer can spend up to an additional $2000 a year or more on merchandise if they have a store's charge card.

It's funny. I grew up with my dad working for JCPenney, the company founded by James "Cash" Penney. Why "Cash"? Cuz he hated credit, and always worked on a cash basis himself. I mention it being funny because when I worked at Penneys over the holidays, they pushed for those credit aps, constantly pushing to get them done, trying to get at least 30 a day.

Now, granted, a customer may not blow $2000 a night at your location, but taking that plastic could mean a customer being more willing to get a speed pass, buying swag, concessions, plus any number of other additional attractions you offer. In fact, taking plastic could be the very thing that gets you a customer in the first place. They don't have to go to the bank ahead of time and take money out from one of their own bank's ATM's, or worry about paying a $3 a pop at an unrelated ATM location.

The key is to make it really easy for your customers to give you money.

C.

HauntedPaws
04-18-2012, 10:48 AM
Right but I prefer passing the service fees I pay on to them. Whether it's called ticket, service, processing or spooky fee you can charge them legally, I'm interested who is doing so. When I got my tickets for The Darkness the fee was added on.

mrfoos
04-18-2012, 11:05 AM
When I got my tickets for The Darkness the fee was added on.

I would love to hear if what they're charging is acceptable to the credit card companies if someone complained. The only way I've seen a company pass the charge on legally is by offering a cash discount. So the cash payer pays the real fee and credit card payers pay the new adjusted fee.

Here is the key point from the link i posted above:

"On the other hand, a utility company that primarily accepts payment via mail could charge a convenience fee on in-person credit card payments that they offer as a bona fide convenience to customers."

So since haunted houses don't normally accept payments via mail, you can't claim the in-person credit car payment is unusual. Right?

BrotherMysterio
04-18-2012, 11:19 AM
Right but I prefer passing the service fees I pay on to them. Whether it's called ticket, service, processing or spooky fee you can charge them legally, I'm interested who is doing so.

But you are passing the fee onto them already!!

That fee is a business expense. All business expenses are represented in the prices you charge. So, by default, you would be passing the fee onto the customer anyway.

The average swipe fee can be on the order of 2%-3% for most businesses. It might be more for small businesses using one remote terminal, depending on what deal you can get from the merchant services at your bank, but generally, you are looking at 2%-3%. (Again, it may vary a bit in different markets.) Now, I don't know how big your haunt is, or what you charge in tickets, but let's assume $10.

So, at $10, that's a $0.20-$0.30 swipe fee. Even at 5%, that's a $0.50 swipe fee.

So, you are going to go out of your way to try and justify charging your customers an extra $0.50 on their credit card slip!?! Are you kidding? You'll spend that much more in labor having your ticket taker either explain that charge on the front end, explain a sign that was posted to try and stem that problem, apologize for it on the tail end especially for those people who didn't read the sign, or have the supervisor de-escalate the situation after the customer starts kicking and screaming - justifiably so - and creating a scene, which might send the next 5 people in line back to their cars.

All that for a $0.50 "spook charge" on a $10 ticket?

Have you ever worked in customer service before? I'm not exaggerating in describing those scenarios. I've seen people lose it big time for lesser reasons.

Also, you have to pay $0.50 on a credit card swipe? Big deal! Your customers paid $5-$10 in gas just to come to your haunt, fighting traffic every step of the way, and chose you guys over all the other haunts in town, or going to a movie theatre (who, btw, don't charge swipe fees). Should they charge you a "preference fee" for choosing your haunt over all the others?

I'm not sure what you hope to achieve by doing that, but I don't see how it will benefit you. Also, Ticketmaster can get away with the crap they pull because they are a monopoly. And as far as The Darkness charging that fee, I can't comment one way or another. I've never been there. But do you really think you can compete with the Darkness, and call the shots in your market?

Incidentally, why are you charging this swipe charge now? Why have you not been doing it in past seasons?

C.

HauntedPaws
04-18-2012, 11:36 AM
I haven't charged it before cuz I haven't been open yet. You again can name the fee what you want to make it legal or fall in the grey area. I know several which charge this fee currently so I'm not trying to debate it's validity but rather who's doing it. You're charging a service fee for the convenience of buying online it has nothing to do with haunt. You face a similar fee type buying movie tickets online.

BrotherMysterio
04-18-2012, 12:00 PM
I haven't charged it before cuz I haven't been open yet. You again can name the fee what you want to make it legal or fall in the grey area. I know several which charge this fee currently so I'm not trying to debate it's validity but rather who's doing it. You're charging a service fee for the convenience of buying online it has nothing to do with haunt. You face a similar fee type buying movie tickets online.

Online is a totally different story. People are more used to that, and it falls under the "customary and reasonable" standard. Plus, they are paying that extra dollar or two for the convenience of skipping the long ticket lines, much the same way they would pay $5-$8 for a speed pass to skip the hour long wait while in line (plus repeat trips thru the haunt and so on). That can be of particular value if you, as a parent, are trying to shepard a large group of kids into the park, which is about as exasperating as herding cats.

If you were talking about online, then that's totally fine, and I wouldn't try to get cute and call it some "nicer" name. Just call it what it is: a "processing fee".

Is an online ticket processing fee indeed what you were referring to when you said you paid that for your Darkness tickets?

C.

HauntedPaws
04-18-2012, 01:07 PM
I just paid a "fee" listed on the invoice.

So when they pay online you can get them to absorb the processing fees. However onsite it seems you absorb them if they use a CC which is why I was trying to see if most here didn't accept CC onsite but provided an ATM for them to get cash.

HauntedMemphis
04-18-2012, 01:49 PM
I just paid a "fee" listed on the invoice.

So when they pay online you can get them to absorb the processing fees. However onsite it seems you absorb them if they use a CC which is why I was trying to see if most here didn't accept CC onsite but provided an ATM for them to get cash.

The vast majority do accept credit cards, and don't try to attach a fee to it. If you don't take credit cards, some portion of your customers will leave and won't be back.

BrotherMysterio
04-19-2012, 09:39 PM
The vast majority do accept credit cards, and don't try to attach a fee to it. If you don't take credit cards, some portion of your customers will leave and won't be back.

Indeed, and not only that . . . .


So when they pay online you can get them to absorb the processing fees. However onsite it seems you absorb them if they use a CC which is why I was trying to see if most here didn't accept CC onsite but provided an ATM for them to get cash.

They are "absorbing" the fees regardless. You aren't "absorbing" anything. It's represented in the pricing structure. Price = Business Expense + Profit. The distinction between online or onsite is essentially apples and oranges. Both round fruits, but two very different species of fruit indeed.

In both cases, the cost of swiping the card is negligible. The average swipe fee as of 2010, according to one financial blog, is about $0.44. For a $10 to $20 ticket, that's negligible.

In the online case, you are paying that for the processing of the credit card charge, and then, as in the Ticketmaster case, you are additionally paying for the additional service of securing a given seat or set of seats, generating the printable ticket with the properly coded barcode, and then removing those seats from the general inventory so that those seats don't get sold again.

Now, granted, with a haunt, you are probably only selling general admission tickets, whether regular or speed pass, but if you are licensing this function thru a third party ticket processing service, then they will charge the same customary and reasonable rates, which include the $0.44 swipe charge, plus other operational expenses, ergo, $1 or $2; and if you are doing this all by yourself, you have to pay for software and set it up yourself, which requires resources, and you pay to maintain the system. Ergo, again, a customary and reasonable $1 or $2.

Either way, you are providing a very specific service in offering online ticketing. You are basically handling the service of selling them a ticket at their desktop instead of in your queue line. You are also saving them the hassle of having to navigate the box office process at your location, waiting in long lines, having to juggle a bunch of kids and other guests in the process, and so on. Instead, they handle that transaction from the comfort of their own home, can drive up, park, pile the kids out, and walk straight into the park, avoiding the hour long wait at the box office, only slowing down to let the ticket taker scan their home-printed tickets.

That convenience and ease of service in online ticket purchasing is definitely worth a buck or two per ticket.

Compare that, however, to the process that they would be avoiding by doing ticketing at home . . .

The customer piles the family, plus friends, into the car. They fight thru traffic driving across town to get to your haunt, passing several competing haunts along the way (and given that you're a first year, they are also taking a chance on an untested commodity). They find a parking spot, get the kids out, and either one parent watches the kids while the other waits in line, or if it's one adult, they might have all the kids in line, with all the kids bouncing around and wanting to go in different directions. After waiting 30 minutes to an hour in line to get their tickets, they finally get to the window and ask to buy however many tickets.

Now, the ticket booth person asks the timeless question. "Cash or credit?" The patron opens their wallet. In one fold they have their paper. Another, their plastic. Both are forms of legal tender; cash in one fold, and plastic in the other, or in the case of debit cards, another form of cash in the other.

At this point, there is no true convenience offered for the one option over the other. If he chooses the left fold, he gets charged one price; if he chooses the right, he gets charged another. After he's waited in line just as long as anyone else, and went thru as much hassle as everyone else, you are now charging him an upcharge just for choosing one fold over another.

In fact, not only that, he's making your job easier, cuz most machines allow for the customer to swipe their card, and there is no counting out of funds, handling cash, or making change. Plus, for every customer who charges the tickets, that's less cash to count at night.

Now, what happens when he swipes his card, sees the slip to sign, and notices that he was "overcharged", as he will think he was? How is that conversation going to go?


Customer: "Eh, hey, I ordered 3 tickets. That's $30. What are all these extra fees?"
Box Office: "Oh, those are the processing fees. That's because you used a credit card. If you had used cash, you wouldn't have had to pay those."
Customer: "But why did you charge me those? No one ever does."
Box Office: "Because we didn't want to have to pay them, so we make you pay them."


That'll be a fun conversation. :sad:

Also, you need to consider the fact that this is your first year, and you are looking at maybe 800 to 2000 customers the first year, depending on your market. That's the beginning core of your burgeoning customer base. It is absolutely paramount that you start effectively building that base, and anything that alienates your customers or damages good faith can damage your long term success.

There's more to this, but basically the real key is to make it real easy for your customer to give you money, and make them real happy to do so.

C.