Cut Your Credit Card Costs with "Buyer Covers Fees"
As you may be aware, credit cards are the “new normal.” Your Buyers expect to be able to pay with their credit cards when purchasing products from your Farm. Today, the majority of folks under the age of 40 do not carry a checkbook. Not to mention going to a bank or an ATM to withdraw cash is simply inconvenient for your Buyers.
In actuality, the end of cash and checks is good for your Farm. Credit cards actually increase the spending power of your Buyers and enable your Farm to get paid faster (Barn2Door customers typically get funds directly deposited in their bank account in 24-48 hours).
“Buyer Covers Fees” can Cut your Effective Credit Card Rate
Now, here’s the great news: Barn2Door can actually help your Farm cut transaction fees because we offer "Buyer Covers Fees" as an option for all forms of electronic payment! For credit cards, the actual savings for your Farm can be huge (depending on Buyer participation). Essentially, if your Buyers voluntarily “opt in” to cover your credit card processing fees, your net effective credit card rates can be reduced dramatically. See below.
While your Farm may not be able to entice 100% participation among Buyers to opt-in to cover credit card transaction fees, even a modest percentage of your Buyers participating can result in savings for your Farm. Given the wide sentiment among consumers for local food, Buyers will readily consider offsetting your fees.
Should I Promote "Buyer Covers Fees" to My Customers?
Many Farmers may have reservations with respect to actively promoting "Buyer Covers Fees" to their existing customers, or feel uncomfortable with the ask. However, consider your Buyers’ world today.
Think of school fundraising events, or most online tuition systems. When making payment in these instances, you are offered the capability to voluntarily pay the credit card fee outright. Why? Because people have a heart for teachers and recognize—the actual cost of school tuition does not fully cover the cost of education.
Nearly all church, synagogue and non-profit donations today offer this same capability. Why? Because people have a strong personal commitment to their faith or because they identify with the good these organizations are doing in their local community.
The list goes on, including the “tips” added to every cup of coffee, haircut and meal that you purchase, where it is typical for Buyers to generously pay a 10% to 25% premium on the products or services provided.
Why should it be any different for Farmers? Your Buyers value you, your Farm practices, your Farm products, your Farm stewardship, and the important role you play in the fabric of your community. While your Buyers may generally romanticize Farming, they do recognize your Farm deals with challenges often outside your scope of control that increase your costs of production.
Net-net, it is okay to be humble and graciously accept the generosity of your Buyers to help you offset your costs. It is common place in the lives of your Buyers everyday. Local food and local Farmers are good—let your Buyers help!
Can I make "Buyer Covers Fees" Mandatory?
Unfortunately, no. We cannot support making the payment of transaction fees mandatory as a prerequisite for acceptance of credit card or ACH payments. Legally, this is generally precluded by state law, notwithstanding a few exceptions state-by-state.
Even if your Farm is in one of those markets where it may be permissible to charge processing fees to your Buyers, your individual contractual obligations with your merchant account providers, issuing banks, or processors likely prohibit it.
Fortunately, an easy way to overcome the complexity of state and contractual law obligations, is to simply offer your Buyers the ability to “opt-in” voluntarily to pay your transaction fees. This is also transparent, and affords the opportunity for your Buyer to feel good about their generosity.
Does This Apply to Bank-to-Bank Payments?
Yes, your Buyers who utilize electronic bank-to-bank payments, often referred to as automated clearing house (ACH) payments, can also opt-in to cover your ACH processing fees (1% on Barn2Door).
While most consumers prefer credit cards for online payments, some of your Buyers may also elect to utilize ACH (particularly wholesale accounts). Either way, "Buyer Covers Fees" is an option for both ACH and credit cards.
GET STARTED TODAY
If your Farm wants to begin accepting credit cards, or if you would like to learn more about the potential savings of Barn2Door’s "Buyer Covers Fees" for your Farm, we would be delighted to speak with you.
Request a Demo with a Farm Account Executive. We look forward to learning more about your Farm’s priorities.