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I am researching online gift certificate sales. The processing fees will easily eat up to $5 - $7 dollars per certificate. Is it OK, legal, ethical, etc to charge more for an online gift certificate than what I charge for the actual massage i.e. $65 for online GC for a massage that I charge $60 for? I accept credit cards and consider those fees as the cost of doing business but those fees are nominal. Thank you for your opinions.
A lot of businesses charge service fees, it is a business decision. As a consumer, I stopped shopping at a few stores when they decided to charge a restocking fee for returned times. I also don't patronize small businesses that charge fees for using credit cards. I always think the business is having a difficult time financially, not an image I would want to project as a business owner.
If you need to include the processing fee, why not add an extra 'gift card signature' service, i.e., aromatherapy, piece of candy, or cup of tea, so they client does not feel like they are being overcharges.
I would consider it the cost of doing business. Just like accepting credit cards - it's a convenience you're offering your clients. And why do you consider the fees associated with credit cards the cost of doing business, but not an online gift certificate? Those online companies are a company offering you a service, and they deserve to make a living providing that service, just like you do providing massage. A lot of work goes into them offering that service. If you don't like the fees, then don't offer online gift certificates. Besides, aren't most of those fees a percentage of your gift cert sale? Meaning: if you raise the sale price, your fee price will increase as well?
Look at it this way: a large percentage of gift certificates will never be redeemed - which is basically free money for you. It will all balance out.
You could use the $60 price for the certificate and then add a $5 processing fee at checkout. That way it's obvious what the extra money is for.
Thanks for the replies. I've decided the gift certificate fees will just be the cost of doing business just like the credit card fees. As a consumer I hate being nickeled and dimed so thank you all for reminding me of this. I now have my online GC's set up on my Facebook page and my website. Thanks again, everyone.
Cost of doing business, yes. Also a business deduction. Keep all records of any fees charged. Another way to look at it is this: the person buying online, usually, is unable to go to your business location during business hours or are from out of town. This means that you are gaining sales that you would not have otherwise. So, you're making money as opposed to losing money.
Marissa, I didn't realize I could deduct fees as a business expense. Thanks for telling me what my accountant should have!
Lee, I'm using The Gift Card Cafe. As a solo, part-time practitioner it was the most cost effective.