Enabling/Disabling Surcharge #
- Go to Setup, then System Setup.
- Go to the Defaults tab.
- Click on Sales.
- Check or Uncheck the box to Enable Surcharge.
- If enabling, Set the Surcharge rate to whatever percentage you prefer.
How Credit Card Surcharge Works #
The credit card surcharge charges the set percentage on the full charge to the credit card. This feature is meant for the business to recoup some of the costs the credit card processing company applies to all transactions made via credit card.
This means that if tips are enabled on the machine, the surcharge may effect the tip left, as it is a part of the transaction the business is being charged a fee for by the credit card processing company.
There is no way to enable surcharges without it potentially effecting the tips left via credit cards. This can get complicated depending on how someone leaves a tip on the credit card machine.
Example Tip Scenarios:
In this example, Tammy gets a Cut and Color for $100 and wants to pay with Visa. The business has a surcharge set for 5%.
Percentage Tip – If Tammy leaves a 20% tip
- The credit card machine is sent $105 as a charge for Tammy to pay ($100 + surcharge).
- Tammy adds a 20% tip on the pinpad which Insight doesn’t see.
- The total charge on the pinpad is now $126, as the 20% tip of $105 comes out to $21.
- Once approved, the pinpad sends a total of $126 to Insight as the total amount charged.
- Insight first calculates the surcharge on the total amount authorized, then subtracts the surcharge from the total, as the surcharge is meant to offset costs of running transactions on credit cards and $126 was charged.
- The formula for this example is: 126 – (126 / 1.05) = $6
AuthAmount - (Auth Amount / (1 + surcharge Rate)).
A $6 surcharge is subtracted from the total payment, leaving $120. - Insight then applies $100 to the invoice as a payment for the service Tammy received.
- This leaves $20 for the tip.
Without Surcharge: $100 service and 20% tip = a $20 tip to the employee.
With Surcharge: $100 service and 20% tip = a $20 tip to the employee after surcharge is subtracted.
Dollar Tip – If Tammy leaves a $20 tip
- The credit card machine is sent $105 as a charge for Tammy to pay ($100 + surcharge).
- Tammy adds a $20 tip on the pinpad which Insight doesn’t see.
- The total charge on the pinpad is now $125. As the pinpad simply adds $105 and $20.
- Once approved, the pinpad sends a total of $125 to Insight as the total amount charged.
- Insight first calculates the surcharge on the total amount authorized, then subtracts the surcharge from the total, as the surcharge is meant to offset costs of running transactions on credit cards and $125 was charged.
- The formula for this example is: 125 – (125 / 1.05) = $5.96
AuthAmount - (Auth Amount / (1 + surcharge Rate)).
A $5.96 surcharge is subtracted from the total payment, leaving $119.04. - Insight then applies $100 to the invoice as a payment for the service Tammy received.
- This leaves $19.04 for the tip.
Without Surcharge: $100 service and $20 tip = a $20 tip to the employee.
With Surcharge: $100 service and $20 tip = a $19.04 tip to the employee after surcharge is subtracted.