Many businesses other than restaurants accept tips from their customers for the services they render. If you are a restaurant owner, then your merchant account will already be set up to process tips from your customers. You simply print up their receipt with a tip line at the bottom of it, the patron writes in the amount they want to add for the tip and at the end of the day you enter in all the tips for the day and then manually batch out your credit card machine.
If you are a small business that accepts tips and are not a restaurant, then it is a bit different of a process. Many non-restaurant small business merchant accounts try to set up their accounts as “Restaurant with Tip” but this is against Visa regulations and causes all transactions to downgrade to Non Qualified which can increase transaction cost by 50 to 100%. So How do you accept tips then?
First, you will need to let your credit card processor know that you are setting up your account as “Retail plus Tip”. The procedure for processing the tip is not like that of a restaurant but still very simple. When you accept credit card payment from your customer you will need to ask them if they would like to leave a tip. If they do, enter the amount on the terminal and the card will be charged for the purchase amount plus the tip amount. Tear off the receipt and give it to the customer and you are done.
Making sure your merchant account is set up properly will prevent you from paying needless high fees and save you lots of headache.
