In the world of online transactions, credit card payments have become increasingly common. Allowing credit cards simplifies payments, automates manual bookkeeping tasks and virtually eliminate the hassle of A/R collection. However, with this convenience comes processing fees.
Traditionally, the notion of passing fees onto customers, termed "surcharge fees," has been subject to stringent regulations and legal complexities. While tempting, implementing surcharge fees demands adherence to specific rules to avoid potential penalties and maintain compliance.
Avoiding the legal complications associated with automatically imposing a convenience fee, Novi enables organizations to request their members to donate the transaction fee voluntarily during online check-out.
Organizations have the options to:
Charge the donation fee by default, allowing users to opt out of paying it.
Do not charge the donation fee by default, allowing users to opt in.
Before diving into the specifics, review an example of
the Donation Fee in action below.
In the screenshot below, a user is checking out on the frontend website for an Ecommerce item that costs $8,000.
After choosing to pay using a Credit/Debit card, the system displays the option to donate additional money towards the credit card processing fee to help cover costs for the organization.
Based on the donation settings, the amount is being calculated as $320.
The user can also see a description of why this amount is listed along with the option to opt in for the donation.
In this article:
Donation Fee Overview & Setup
To offset credit card fees, Novi gives organizations the option to use the "Request Donation" feature to suggest a fixed donation amount during checkouts for credit card payments. Donation functionality allows users to either opt-in or opt-out of making the donation.
Admins can access the donation setup options by navigating to Association Settings > QuickBooks tab > Request Donation section and can check the box to Enable Donation Field on Credit Card Transactions. As shown in the screenshot below, once the box is checked additional fields will appear to complete the setup.
Apply To
Check the boxes that the donation field should appear on checkout transactions:
Dues Checkout - New Membership Checkout & Manual Renewals, checkout using credit card or ACH
Events Checkout - Events - Initial Event Registration Checkout using credit card or ACH
Ecommerce Checkout - Initial Product Checkout using credit card or ACH
Member Compass Invoices - Paying for Open Invoices, including emailed smart renewals
Donation Fee Label
Required
This label will show during checkout if the selected payment method is Credit/Debit Card.
The default label is "Donate Transaction Fee," but you can edit this as needed.
Donation Fee Description
Optional, but highly recommended*
*This is an organization's opportunity to explain why the user should opt in to donate additional money towards an organization's processing fees. Since this is an optional donation, this is the moment to "sell it" (and to also help users avoid confusion about what the donation covers)!
The purpose of this field is to provide users with more information about the donation request. Text added in this field will be displayed in users' cart.
Example: "Please consider donating the estimated fees for your transaction to help minimize costs for our association."
Default Suggested Amount
Required
This is the suggested amount of the donation fee, which will be a percentage of the total due. The minimum is 1% up to a maximum of 5%.
The specific values to choose from are:
1 %
2 %
3 %
4 % [Default]
5 %
Charge By
Required
The options to choose from are:
Do not charge by default. Allow users to opt-in.
Charge by default. Allow users to opt-out. [Default]
Donation Fee Item
Required
Map the fee donation to a QuickBooks Item.
Click in the drop-down to choose from the list of all the "Products & Services" in QuickBooks Online. It is recommended to consult a bookkeeper/accountant for this field.
Donation Fee Class
Optional
Map the fee donation to a QuickBooks Class if applicable.
Click in the drop-down to choose from the list of all the classes in QuickBooks Online. It is recommended to consult a bookkeeper/accountant for this field.
Donation Fee Line Item Description
Optional
This text will display on the financial transaction.
Example: "Credit Card Donation Fees"
Donation Fee User Experience
The experience when paying by credit card will be slightly different depending on which option is setup in Association Settings for the "Charge By" setting.
Option A: Opt-In
Do not charge by default. Allow users to opt-in.
The opt-in option gives users the option to check the donation fee box to pay the donation fee.
Option B: Opt-Out
Charge by default. Allow users to opt-out.
The opt-out option requires users who do not wish to donate to uncheck the donation fee box to remove the amount from their total due (which is the default).
User Experience when Paying with a Credit Card
If the donation fee is enabled, users on the frontend and admins on the backend will all see the donation option for credit card payments.
There will be a checkbox in the Payment section of the cart, including the Label, the Amount, and the Description of the Donation Fee. (see screenshot below)
When setup for opt-in: By default the box will be unchecked, excluding the fee from the total.
When setup for opt-out: By default the checkbox is checked, and the fee will be included in the total.
Users can opt-in or opt-out by checking or unchecking the box, respectively. A checked donation box adds the fee to the total.
The amount of the donation fee is displayed alongside the "Donation Fee Label" even when the box is unchecked.
The suggested amount is fixed and not editable in the cart.
Examples of Option A (Opt-In)
In the screenshots below:
The Donation Fee checkbox is unchecked by default.
If the user chooses to check the box, the fee amount is added to the total.
FRONTEND Example of Option A (Opt-In): |
BACKEND Example of Option A (Opt-In): |
Examples of Option B (Opt-Out)
In the screenshots below:
The Donation Fee checkbox is checked by default.
If the user unchecks the box, the fee amount is removed from the total.
FRONTEND Example of Option B (Opt-Out): |
BACKEND Example of Option B (Opt-Out): |
IMPORTANT NOTE FOR ADMINS
If Donation Fee set to Opt-Out (Option B above), admins should be sure to ask the member for permission to include this optional donation amount before charging the card.
Donation Fee Transactions
Credit card payment at time of purchase = one transaction
Credit card payment on an invoice = multiple transactions
Scenario 1: Credit Card Payment at Time of Purchase
When a user completes the checkout process and they select the "Credit/Debit" option, a Sales Receipt is generated in their account. If users opt-in to the Donation Fee, this extra line item will be included on the Sales Receipt.
Scenario 2: Credit Card Payment on an Invoice
When users pay an outstanding invoice with a credit card, there is a distinction in processing the transaction:
Similar to Scenario 1 above, users encounter a checkbox in the Payment section, where they can opt-in or opt-out by checking or unchecking the box, respectively.
However, in the case of paying an invoice with a credit card:
Upon opting to include the donation fee and completing the checkout, the system will generate a separate invoice to account for the donation amount. The Transaction Type for this invoice will be labeled as "Fee Donation Invoice" in Novi.
The single credit card payment will then be applied to the invoices, bringing the balance to zero.
This dual invoice approach ensures accurate accounting for the donation fee. Learn more about why a second invoice is created below.
Why does the system create a second invoice for the donation fees while paying an invoice?
Payments may be made on invoices for which books have been closed or for which the accounting period has ended. In order to account for a member opting in to donating transaction fees, creating a new invoice dated with the payment date (and therefor the donation date) is logged.
By generating a new invoice specifically for the donation fee, the transaction is accurately reflected in current financial records, ensuring compliance and avoiding potential discrepancies. Additionally, this approach allows for a single credit card charge, simplifying payment processing for both the user and the organization.
Filter By "Fee Donation Invoice" Transaction Type
As described above, any time a user opts-in to pay the Donation Fee while using a credit card to make payment on an invoice (or possibly multiple invoices), the system will create an additional invoice to account for the fee donation line item.
This new invoice will be labeled with a Transaction Type of "Fee Donation Invoice" so it can be filtered in the Transactions List View.
