At Wodify, we are continuously looking for ways to help business owners streamline their operations and maximize their profitability. This functionality enables business admins to pass on credit card or ACH processing fees to their clients, saving them significant money in the process.

IMPORTANT: Before implementation, be sure to consult legal counsel or financial experts familiar with the regulations in your jurisdiction. 

Here are three communication templates that you can use to notify your clients of the additional processing fee. They're designed to explain the change tactfully and highlight the benefits.

If you are debating whether you not passing on processing fees makes sense for your business, we encourage you to book a call with our Account Management team to discuss your options. 

In this article, we will cover:

• Enabling Passing on Processing Fees for your location
• Toggling Passing on Processing Fees for individual invoices
• Toggling Passing on Processing Fees for individual memberships
• Toggling Passing on Processing Fees for Simple Sign-in Drop-ins
• Toggling Passing on Processing Fees for Point-of-Sale
• See How much you saved on Processing fees
• Frequently Asked Questions

Enabling Passing-on Processing Fees for your location

Check out the steps below to set up Passing on Processing Fees (it takes less than a minute)!

Toggling Passing on Processing Fees for individual invoices

You may want to toggle to pass on or absorb the processing fee for specific invoices. Now all applicable invoices will have a dropdown that allows you to choose either Passing on or Absorbing.

Toggling Passing on Processing Fees for individual memberships

You may also want to toggle to pass on or absorb the processing fee for specific recurring memberships. When you toggle the fee option to Passing On, all auto-renewing membership detail screens will have a dropdown that allows you to choose either Passing on or Absorbing for the processing fee section.

Toggling Passing on Processing Fees for Simple Sign-in Drop-ins

You may also want to toggle to pass on or absorb the processing fee for a Drop-in payment. Clicking on the pencil Icon or Edit will allow you to sign in as an Admin to Edit the Drop-in amount and to choose either Passing on or Absorbing for the processing fee section.

Toggling Passing on Processing Fees for Point of Sale

You can also toggle to pass on or absorb the processing fee for retail purchases in Point of Sale. In the Admin interface, you can now choose either Passing on or Absorbing for the applicable processing fee section. This option will not be available for the self-service tab.

See How Much You Saved on Processing Fees

You can now see how much fees you have saved by passing on your processing fees to your clients.  Here are some of the places to see all the fees saved:

1. Financial > Payouts
2. Financial > Transactions
3. Analytics > Reports > Financial > All Invoices
4. Analytics > Reports > Financial > Payouts 

With the new Pass-on Fee Feature, Wodify aims to help gym owners save money by passing on processing fees to clients. By enabling this feature, you can ensure that you receive the full payment amount while providing a transparent fee structure to your clients. Stay ahead of the competition and increase your gym's profitability with this innovative feature from Wodify.

Cash Disclaimer

When passing on processing fees, you can no longer accept cash or check as a method of payment for your business. If you accept (or even state that you accept cash or check), it may result in fines from credit card companies, starting at $1,000. See FAQs below for more details.

Free Unlimited

When on the Free Unlimited plan, you cannot accept cash or check as a method of payment for your business. If you accept (or even state that you accept cash or check), it may result in fines from credit card companies, starting at $1,000. See FAQs below for more details.

Frequently Asked Questions

Q: Why can’t I accept cash or check if I use the passing on processing fees feature or if I’m on the Unlimited Free plan?

A: The Unlimited Free plan and passing on the processing fees are simply convenient ways to add an additional fee to your invoices.  The feature is named “passing on processing fees” or “service fee” as it lowers your processing rates to 0% and adds a nominal fee to each customer's invoice.  However, you can rename the line item of the fee to anything of your choosing, for example “service fee”, “community fee” or “admin fee”. 

It has been structured this way to ensure that the fee is compliant with a wide variety of credit card surcharging laws imposed by various legal jurisdictions as well as the rules imposed by major card card companies, such as Visa and Mastercard.

If you accept cash or check for a payment, the fee calculated by passing on processing fees or the Unlimited Free plan becomes too similar to a credit card surcharge.  The major card card companies, such as Visa and Mastercard, view the fees as disincentivizing the usage of credit cards if they can be avoided by paying with cash or check.  To combat this, they have created very stringent rules relating to how credit card surcharges are structured.  By not accepting cash or check, we have been advised that this fee is not considered a credit card surcharge as the fee can’t be avoided by accepting cash.

While not accepting cash may seem unusual, we believe it is in your business’s best interest as it will help keep you compliant with the complex rules and laws, but it will also help you run a more efficient and profitable business (just think of all the time that you will save not having to go to the bank for deposits or manually adjust your account system!).

Q: If I accept cash or check when passing on processing fees or on the Unlimited Free plan, what are the potential fines that you reference?

A: As mentioned above, accepting cash or check when passing on processing fees or on the Unlimited Fee plan would likely be a violation of the very stringent rules of the major credit card companies, such as Visa and Mastercard.  When a violation of these rules is identified, the credit card company will assess a non-compliance fee starting at $1,000.  If the identified violation is not promptly fixed, they may assess stiffer penalties of $5,000, $25,000, or more.

The credit card companies are actively trying to identify violators by using secret shoppers who visit or call merchants to see if they are violating their surcharging rules.  Furthermore, they have web portal which allows for card holders to anonymously report merchants that they  believe to be in violation of the rules.

Q: When a refund occurs, does the processing fee also get refunded?
A: Yes, but you can do a partial refund on the paid invoice's line items by refunding just the item.

Q: Why can’t I recalculate the transaction fees on the invoice?
A: We completely understand this question. The answer is that passing on the processing fee increases the amount of the initial invoice, which in turn, increases both the cost of processing that invoice and any associated sales taxes.
Sometimes, we find it hard to wrap our heads around this conceptually. So let’s take a simplified example… If a customer is charged $100 and the fee rate is 5%. Many folks would expect to see a total invoice of $105. The problem that arises is that the fees associated with a $105 charge are more than a $100 charge. So the system estimates how much the fees will be prior to calculating the amount of fees to charge and pass along. So, on a $100 invoice, the system estimates $5 in fees and calculates the fee as 5% of $105 or $5.25. From there, the final invoice is the $100 plus the $5.25 or $105.25. (There is a circular logic issue here whereby the $105.25 charge costs more to process than the estimated charge of $105, but we stop the calculation at one iteration to not overcomplicate an already complicated calculation.)
For those of us who love to dive into the details, we have also created a handy calculator that you can download here (make a copy) to recalculate any invoices or run any test scenarios that you want.