Credit card surcharges are due to be scrapped for consumers from 13th January 2018. In this post we detail our position and reasoning for having payment processing charges as standard built into our quotes and offers.
The new laws for payment processing charges
From January 2018 all payment processing charges for consumers are banned. A consumer is a private individual buying goods or services for their own personal use. As such, non-consumer entities (business, charities, schools and other local government bodies, allotment associations, sports clubs etc) are not included in this change in law. As non-consumer purchases form the vast majority of our business we don’t want this change in law to mean a dramatic change across the whole of our business.
Why we want to charge payment processing charges
Firstly as I’m sure many of our customers can appreciate, a shipping container is not your typical consumer product. We are primarily an industrial supply company and as such only a tiny proportion of our customer base are consumers buying shipping containers for their own private use.
As a business we act very much like a commodity trader, we are selling an expensive item for the slimmest possible profit margin. When the payment charge on a single shipping container can go over £50, this is a significant chunk of our mark up and we simply cannot absorb this cost.
Some of our products are being sold for under £100 mark up at our end and we genuinely can’t afford to loose or absorb half our profit on a job. We don’t particularly want to reduce our range to only our most profitable options either or limit our options to customers in any way. If we raise our prices across the board we may be uncompetitive versus a competing business that is pricing a commercial rather than a consumer price and we are aware that we are in a very price sensitive industry. We feel if we arbitrarily increase our costs across the board we will loose business as a result, we also feel this isn’t fair to the customers we have who do not pay via credit card or other payment options which incur charges for us as a business.
Credit card payment processing in its own is a very tricky for a smaller business to manage. Different credit cards will charge different amounts and to be frank when we have tried in the past to ask customers which type of credit card they have ( for example Mastercard personal cards, Mastercard credit cards registered abroad, Corporate Mastercards and fleet Mastercards all charge us a different rate, with a similar number of variations for VISA cards. To be frank many customers do now know which variant they have). Charging the exact price we incur is quite honestly very difficult to manage. We’d have to balance the cost of managing this payment process – so, instead of spending an hour of our time every time we sell a container that’s paid for using a credit card, we could charge you our time for doing this. In fact, if we had to do that, we’d seriously consider dropping the card payment facility. So, we feel that charging a surcharge is easier to manage and ultimately cheaper for you.
On top of this, for us to be able to accept card payments, we need to undertake various compliance stress tests to ensure our systems are up to scratch to meet credit card rules (which we pay for as a business overhead) and we need to invest time and money ensuing our staff are fully trained in card payment processing rules and guidelines.
The capacity to take credit cards is not free or even cheap when its only a minority of our customers using this service. We do want to continue to offer credit card payments as we understand this is a lot easier for some of our customers.
However, at present all our costs work out at 1.5-2.55%, plus additional costs if the card is based abroad, plus a monthly standing charge for the service, so by charging out 2.75% across the board, we believe we are charging a fair fee with respect to our costs, and if we added in our true costs to manage being able to offer credit card payments at all, the charge wold be higher. We therefore believe we are charging less than the true cost to the business.
At present our only other obvious options are to restrict our accepted payment methods for consumers to not include credit cards, paypal or any other payment method that charges us, or for us to stop consumer sales altogether. We view both of these options to be less helpful than our current setup but we do also welcome any feedback from customers on this issue.
Our position on Consumer pricing
All quotes as standard will be offered on the basis of a ‘non-consumer’ purchase. i.e. we assume you are buying this on behalf of a business or other organisation and all quotes are noted as such.
If you are buying this as a consumer, we ask that you reply to your quote letting us know and asking for a consumer price, we will then re-quote accordingly. Our current expectation as we introduce this system is that consumer prices will increase 3-5%. We would like to return a discount to customers then choosing a lower cost payment method (eg BACS transfer or debit card) – at this time we understand we are not allowed to do this so we will have to stick with a higher overall consumer price.
We understand this may not be good news for every customer but we hope, that by being frank, honest and open with our customers will be the best long term option for all involved. We will continue to offer quality shipping containers you can trust at market leading prices and we will continue to do all we can to remain as competitive as possible to all our customers whether consumers or not. Should you be looking for a shipping container please feel free to browse our online ranges for more info.
We would like to add that in no way will any of this ever affect the products we deliver. We will still be offering the same guarantees, and our suppliers will be doing the same work to the same standards.