Town Adds Credit Card Convenience Fee To Bills

Published 4:13 pm Thursday, December 29, 2011

FARMVILLE – The Town of Farmville has begun charging a convenience fee for those using a credit card to pay their Town bills.

The practice is common among localities, with the Town of Farmville being one of the few that did not charge a fee.

Until Town Council's vote this month, the Town had been paying the fee charged by credit card companies, cutting into the revenue stream.

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In October, for example, the Town paid over $900 in fees to credit card companies when over $20,000 in payments were made to the Town via credit card.

That has ended.

Town Council approved a convenience fee of 2.5 percent for those paying in person, and three percent for those paying on-line.

By comparison, Cumberland County charges a 2.8 percent fee for those paying in person or by phone, and three percent for on-line payments of County fees, according to the Town.

Prince Edward County also charges fees-1.97 percent in person and also three percent on-line, it was noted.

“We allow people to use credit cards and with people using credit cards we have to absorb the fee. The County (Prince Edward) does not absorb the fee and very few localities do absorb the fee,” Town Manager Gerald Spates explained to council members during their regular December monthly meeting, “so I would like to ask council to allow us to start charging a 2.5 percent convenience fee, if paid in person, and three percent if paid on-line.

Noting the October payments, Spates said, “on fees collected, we collected $20,541 on credit card-the total fees were $921, so that's revenue that we're losing by allowing people to use their credit cards.”

The Town absorbed $617 in credit card fees in September, $405 in August, and $782 in July based on payments to the Town via credit card. Because different credit card companies charge different fees, the Town paid 4.49 percent of September's bill payments in fees to credit card companies, 3.38 percent in September, 3.23 percent in August, and 2.68 percent in July.

The town manager continued, noting that, “we've got people paying the meals tax that way so they're collecting that meals tax and paying on credit card and it's costing us money.”

Spates had recalled, for council's edification, a businessperson in town who, he said, would “charge all of his gas for the whole month until the person would say, 'OK, the bill's due' and then he'd pay it on his credit card and he wouldn't have to pay that credit card bill for 20 days and he'd keep on no interest for 50 days, without paying any interest on it.”

The town manager's audience was sympathetic.

“I think it's becoming a pretty common practice to do exactly this,” observed council member Dr. Edward I. Gordon, “”so I make a motion that we do this.”

And they did.