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surcharging credit card charge / Do you need to use the Schedule of Equipment and Services
November 19, 2018
surcharging credit card charge
    We have your All-in-One agreement and have a question for you.
Are we required to mention surcharges in an agreement a customer signs when they use a credit card for down payment, final payment, and monitoring services?
Thanks for the guidance. 
    Accepting credit cards years ago was not the norm. But for years alarm companies have permitted subscribers to use their credit card to make payment. The payment includes down payments, progress payments, final payment for installation, and then repeated payments for the continuing services, what I call the RMR services [monitoring being the most common, but also repair service plan, inspection plan and portal access]. 
    Recently I recommended Biller Genie, []a free recurring billing program that integrates with Quick Books offered by SkyBank Financial, a credit card processing company that works closely with the alarm industry. 
    The Standard Form Agreements come with credit card authorization. You should not be charging a "surcharge", "processing fee" or "convenience fee" without disclosing that fee and getting authorization. That notice of surcharge is not presently included in the All in One agreements or other Standard Form Agreements. if you want this provision let us know after you get and review the contracts.
     A convenience fee should correspond to the cost of processing the credit card. It can be expressed in terms of percentage of the charge or a fixed charge, or both. However you set it up, make sure it's very clear to the consumer and that consent is given.
     Should you consider requiring this extra fee? It will certainly add a small amount for processing the credit card. I suppose if you look at your credit card charges each month the processing fees do add up. Passing those charges on to the party making payment will net you a quantifiable amount each month. But how many subscribers won't pay by credit card because they don't want to incur the charge. How many of those subscribers will end up not paying at all? Until you can answer these questions I don't think you should impose surcharges.
    I asked Tom Aronica from SkyBank Financial to respond. Here is his response:
    There are a variety of rules that are set by Visa and MasterCard about surcharging on credit cards. Without going into detail, the highlights are that 1) it has to be clearly posted and explained to the customer at the point of purchase, 2) you can’t surcharge on debit cards (even if you swipe or key them) and 3) it has to comply with state by state regulation. A common alternative is called a “Cash Discount” program where you raise your rates by X% (usually equal to your processing fee) and offer a discount for cash or check, but this is usually too disruptive for service businesses to implement.
    We are adding 100% compliant surcharging to Biller Genie sometime next year. Once implemented, our system will enforce the interstate rules based on merchant and customer location in addition to verifying debit bin ranges prior to ensure 100% compliant surcharging. Combine this with our new customer portal, automated reminders, and synchronization with QuickBooks, Biller Genie will literally become your Virtual Assistant who works 24 hours a day, for free!
    Want to learn more about Biller Genie? Click here and schedule a demo today:
Thomas J. Aronica, CPP
Do you need to use the Schedule of Equipment and Services
    We are new to using your Standard Form contracts and am in process of setting up contracts for all of our subscribers. I notice the Commercial All In One includes a Schedule of Equipment and Service.
    All of our customers own their equipment; we just do the monitoring. Is it necessary that we list out all their hardware/equipment and services on the Schedule of Equipment and Services?
    The All in One has sufficient provisions on the first page of the contract to identify the equipment and services. There are a number of check boxes that covers those issues. If you don't need additional space to specify the equipment or service then you don't need to use the Schedule of Equipment and Services. Or you can use that form to simply say you are providing monitoring service only to subscriber owned equipment installed by others. 
    Provisions in the Standard Form Agreements that do not pertain to your business can be omitted. But keep in mind that the agreement does provides that the subscriber was offered additional equipment and services. It may be that it's a good idea to leave in the other services even if you don't offer them. If the subscriber wants the service and is willing to pay the price I am fairly certain you would be willing to provide the service through a subcontractor.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700