Hi @mattbjorkman. I’m going to tackle this from my research when Square announced their partnership with Afterpay. I did a lot of web searches to see what, if anything, was around in the way of laws and regulations, etc, regarding BNPL fees. But first, a disclaimer… talk to an accountant/CPA who is familiar with your state’s regulations and proposed regulations. From what I can tell, BNPL fees are pretty much the Wild West in the USA right now! Having said that…..
My eleven-year experience with Square has taught me one thing. If they prohibit something they are very plain about it in their Support Documents. There is not one word from Square/Block on the subject of passing BNPL fees through to customers, so my strong suspicion is that they have no opinion on the subject. If that’s not true, I’m sure that they will chime in here and correct me!
The FTC has some guidelines about BNPLs here. Basically, their guidelines are treat everyone the same, don’t make misleading claims, and be prepared to take responsibility when something goes wrong EVEN if that something wasn’t your fault. I’m including a screen shot of part of that with the highlighted portion having bearing on your question.
Based on that, alone, it seems that the FTC assumes that some BNPL plans will come with consumer costs and that others won’t. They seem to be primarily concerned with retailers treating everyone the same and either charging all BNPL customers or not charging all BNPL customers. My guess — and please remember that this is only a guess — is that as long as you are clear with signage, statements in your online store, etc, that you can indeed pass on all or some of these fees to the customers. I can’t speak to the advisability of doing that as, by now, most everyone assumes that BNPLs come with either no fees or very low fees. You’d obviously have a PR challenge should you decide the buck what has become the norm.
Square does offer us a feature called Service Charges that can be added to invoices. Obviously, you’d only want to manually add those to invoices that customers are paying via Afterpay, and not the others, so automatic surcharges won’t work for you. Also, using surcharges in your online store would not work at all as far as I understand them since online surcharges are an all-or-nothing proposition right now.
That’s all I’ve got. It’s probably not helpful but this IS a very murky area right now. Like I said at the beginning, consult a CPA and/or an attorney. In this case, asking forgiveness from a government agency if you do something wrong is not ideal in this circumstance.
Regards,
