Does running customer's debit card through Square (as credit) hit them with extra fees from bank?

[mainstbooks]

Hello,

So my business has been using Square register with the magstripe reader for a few months and we are very happy with it. However, we've had a few customers with a problem. When I swipe their card, because it asks for a signature instead of a PIN/doesn't give them the choice between debit and credit, they say that they will "get in trouble" with their bank for running a debit card as credit.

I know Square processes the cards in the same way in requiring a signature, but is it reported to the customer's banks as falsely run as credit and could somehow get them penalized?

Sorry, I don't understand exactly how the different cards are processed - but I'm not sure that these customers (who are invariably grumpy older men) understand either. It's not as though they (even the regulars) have come back saying, "Hey, I got penalized because you ran my debit card as credit!" so I'm not sure if their fears have foundation...

I've used my own debit card through Square and haven't noticed any difference from using it at regular registers. If a customer tells me their card can only be run as debit, should I tell them we can't run it at all (since it will be processed as credit) and they'll have to pay cash instead? But of course they never tell me *before* I swipe the card, only after, so I'm not sure how to prevent it...

Thanks for your advice!

~ Emily

[EJ_]

Hi Emily!

With Square, Debit Cards are run just like Credit Cards on the backend, and they're processed with the same rates as well. 

There shouldn't be any additional fees that are imposed on your customers by their banks. 

Usually if there is an additional surcharge for using Credit vs Debit, it is imposed by the Merchant Service Provider on the Seller, in which the Seller then passes the surcharge on to the customer. 

Let me know if you run into any customers with an actual charge for this, as it would be an interesting case to pass over to our Product Team.