A. Movie Theater Example:

• Standard operation: Selling tickets at the box office (no fee)
• Alternative channel: Online ticket purchase (adds $1.50 convenience fee)
• Customer benefit: Skip the line, buy from home
• Result: Customers understand paying for genuine convenience

When should I NOT use convenience fees?

Don’t use convenience fees if:

• You’re primarily an online business (no alternative channel exists)
• You operate equally across multiple channels
• You can’t offer a genuine no-fee alternative
• Your state has restrictions that make it too complex

Better alternatives: Consider dual pricing instead, which works for businesses without clear alternative channels.

A. Key difference: Convenience fees have specific card network rules you must follow:

• Must be flat-fee (not percentage)
• Must apply to all card types equally
• Must be for genuine alternative channel
• Requires specific disclosure

Just randomly charging more online without following these rules could violate card network agreements and get you in trouble.

To learn more or get your questions answered, talk to one of our experts.

A. Yes, but only if you have legitimate alternative channels for different transaction types.

Example that works:

• In-person purchases at your store: No fee
• Phone orders: $3.00 convenience fee
• Online orders: $3.00 convenience fee

Example that doesn’t work:

• Some online orders have fees, others don’t (inconsistent)
• Different fees for different products on same channel

Consistency within each channel is key to compliance.

To learn more or get your questions answered, talk to one of our experts.

A. This is a business decision you need to weigh:

Consider:

• Are they absorbing costs or just haven’t addressed them?
• Can you communicate the value of your alternative channel?
• Is the convenience genuine enough that customers will pay?
• Could you use dual pricing instead to stay competitive?

Some businesses find success by emphasizing other value-adds while using convenience fees. Others switch to dual pricing to match competitor pricing structures.

To learn more or get your questions answered, talk to one of our experts.

A. Yes, but with considerations:

For recurring payments:

• Apply the same flat fee each billing cycle
• Clearly disclose at signup
• Offer alternative payment methods (ACH, check)
• Ensure your billing system can handle it

Best practice: Many subscription businesses find dual pricing or simply building costs into pricing works better than adding recurring convenience fees.

To learn more or get your questions answered, talk to one of our experts.

A. It depends on your business model:

Choose convenience fees if:

• You have a standard payment method (in-person) and want to add an alternative channel (online/phone)
• You prefer a flat fee structure
• You’re genuinely providing convenience through the alternative channel

Choose dual pricing if:

• You want to eliminate processing costs across all channels
• You need a solution that works in all 50 states
• You prefer customers seeing both prices upfront (card price vs. cash price)
• You want better customer acceptance

Learn more the differences between convenience fees  and dual pricing here

Still not sure? Schedule a free consultation at 855-872-6632 or sales@intellipay.com. We’ll analyze your business and recommend the best option.

A. Potential consequences:

• Card network fines: $50,000 to $1 million for serious violations (not $500-$25,000)
• Loss of merchant account: Businesses may be placed on the MATCH list (Terminated Merchant File), making it difficult to obtain merchant accounts in the future Stripe
• Customer complaints and chargebacks: Valid concern
• State penalties: Typically $500-$1,000 per violation depending on the state

If your account faces issues, contact your processor immediately to combat problems before they become more serious.  Acting quickly can help minimize disruptions and demonstrate good faith.

Bottom Line: The consequences are  severe making compliance even more critical.

To learn more, talk to one of our expert consultants.

A. No. Unlike surcharges (where 30-day notification is mandatory), there is generally no requirement to notify Visa or Mastercard before implementing a convenience fee.

• Surcharges: The card networks require merchants to notify them and their payment processor at least 30 days before implementing a percentage-based surcharge.

• Convenience Fees: Since this fee is charged for the alternative payment channel (and not just for using the card), this specific notification rule does not apply. However, you must still clearly disclose the fee to the customer before payment.

To learn more, talk to one of our expert consultants.

A. No. Convenience fees only apply to alternative payment channels.

Convenience fees are only permitted for:

• Online payments
• Phone payments
• Kiosk/automated payments
• Mobile app payments

You cannot charge convenience fees for:

• Standard in-person transactions at your physical location
• Your primary/standard payment method

Why? The fee must be for the “convenience” of using a non-standard payment channel. If in-person is your standard method, you cannot charge a convenience fee for that same method.

Exception: If you normally only accept cash or checks in-person, you could potentially charge a convenience fee for card payments, but consult your processor first.

To learn more, talk to one of our expert consultants.

A. No. Card network rules prohibit combining convenience fees with surcharges.

You must choose one approach:

• Convenience fees for alternative channels (online, phone)
• Surcharges for credit card transactions (where legal)
• Dual pricing (cash vs. card pricing)

Why? Card networks prevent “double-dipping” by charging multiple fees on the same transaction.

Alternative: Some merchants use dual pricing with convenience fees for alternative channels, but this requires careful implementation with your processor.

To learn more, talk to one of our expert consultants.

A. No. Convenience fees must be reasonable and should not exceed your actual processing costs. Most card networks require fees to be a flat amount—not a percentage—and they must reflect only the cost of offering an alternate payment channel, not profit or excessive charges. Always clearly disclose fees and check network and state rules for specific limits

To learn more, talk to one of our expert consultants.

A. No. Major card network rules strictly prohibit applying a convenience fee to recurring or installment transactions.

• The Rationale: Convenience fees are meant to be a one-time charge for a single decision to use an alternative channel. Applying them to automated or recurring payments is considered a violation of the network rules.

• Examples: You cannot add a convenience fee to automatic monthly utility bill payments, insurance premiums, or membership dues that are charged on a recurring basis.

To learn more, talk to one of our expert consultants.

A. No. Your convenience fee must be the same for all card types:

• Same fee for Visa, Mastercard, American Express, and Discover
• Same fee for credit and debit cards
• Same fee for all customers

A. No. For nearly all merchants, charging fees on debit card transactions is strictly prohibited by card network rules.

Key Takeaway: If you are a standard retail or e-commerce business, you cannot charge either a surcharge or a convenience fee when a customer pays using a debit card.

A. Yes, absolutely. Card networks require clear disclosure before the customer completes their payment.

You must show:

• The fee amount
• That it’s for an alternative payment method
• The information before they click “pay”

No surprise fees at checkout. This is the #1 rule.

A.

Online payments: Show the fee on your payment page before checkout
Phone payments: Tell customers verbally before processing
Mobile app: Display clearly before payment confirmation
Receipts: List it as a separate line item

Keep it simple and visible. Customers should never be surprised.

A. You must notify:

• ✅ Your payment processor (they set up your system correctly)
• ✅ Your customers (through clear disclosure)
• ✅ Your staff (they need to explain it consistently)

You don’t need to:

• ❌ Register with Visa or Mastercard (for standard convenience fees)
• ❌ File paperwork with the government

Your payment processor handles the technical compliance—you just need to communicate clearly with customers.

A. If in-store is your primary business and online is the alternative, you can charge a convenience fee for online orders.

If you operate equally in both channels, convenience fees probably aren’t the right fit. Consider dual pricing instead, which works for businesses with multiple standard payment channels.

A. When you refund a purchase, you typically refund the full amount including the convenience fee. Your payment processor handles the technical details.

A.  Keep documentation of:

• Your pricing policies and disclosures
• Staff training materials
• Customer communications about fees
• Copies of signage and website notices

This protects you if questions arise about your compliance.