The Town of Clayton picked up the tab for $3,000 worth of credit-card fees last year for things like parks and rec classes and low-cost permits. But that will likely be the last time.
Credit-card processors treat municipal utility payments differently from other payments, charging a flat fee to customers using plastic to pay their water bill, but a variable percentage fee for one signing up for a basketball league. The Town of Clayton, though, has been treating all customers the same, charging $3.95 every time a customer uses a credit card, even when the actual fee is lower or higher. Ultimately, the policy meant the town paid its credit-card processor $3,000 in March to cover fees beyond what the $3.95 totaled.
Without a change in policy, the town should not accept credit cards for non-utility payments, said Ann Game, Clayton’s customer-service director. “We are not following what we should be doing,” she said. “We were billed for credit cards we took that we should not have taken. We should not process a credit card for a non-utility, current state.”
For non-utility payments, the town has a $500 cap when using a credit card, meaning developers can’t come in and pay four- and five-figure fees by card. Game said most non-utility payments are for building re-inspections and parks and rec programs, with the average payment around $75.
Changing the policy would mean a variable fee of 3 to 5 percent, with the type and brand of card determining the fee. Those fees, Game added, never come to town hall and are instead siphoned off to the credit-card processor at the moment of the transaction. Under the percentage fee Game proposed, residents could end up paying less than before, with 5 percent of $75 meaning a $3.75 fee and 5 percent of $35, the typical cost of a rec class, meaning $1.75. But Game also proposed ending the $500 cap, so a developer paying a $20,000 tab would find a $1,000 fee if paying by credit card.
Not changing the policy would mean the town would continue to pay fees above the $3.95 Clayton customers currently see. Still, some council members felt uneasy about the fees. Councilman Michael Grannis owns a downtown restaurant and deals with credit-card fees on a regular basis. He had concerns the fees would be something in addition to what the credit-card processors get from Clayton customers.
Councilman Art Holder compared the town to Macy’s and pointed out that the department store charges the same price for a sweater whether a customer pays with a credit card or cash. Interim town manager Nancy Medlin said credit-card costs are already built into the prices Macy’s charges for its goods.
“When you go to Macy’s and you buy a sweater and you use your credit card, Macy’s pricing structure on that sweater is set up to cover the cost of you using your credit card,” Medlin said. “Our current fee structure for things like building inspections, re-inspection fees, those are not set up to absorb those charges. In order for us to absorb those charges, we’d need to increase those fees.”
The council agreed to place Game’s proposed policy change on its Oct. 3 agenda.
Drew Jackson: 919-553-7234, Ext. 104; @jdrewjackson