Service Charges Q&A: How can we better serve your business service charge needs?

Hello Seller Community — as we make our way through January, I'm stoked to have our Commerce Platform team join us again!


This time around, the focus of this Q&A is on all things related to service charges and our product team will address your questions/feedback on Thursday, January 27, at 11am PST / 2pm EST.




The Commerce Platform team manages the service charge product experience, which allows sellers to add a charge to an item or a cart before checkout. They want to know: What are your biggest use cases for service charges? Is auto-application of the charge important for you? What are the biggest gaps or pain points that you're currently encountering with service charges at your business? This discussion will help inform next steps on a wide variety of feature requests that we've received over the years.


A few examples of areas for improvement where we're looking to get feedback include:

  • Bottle Deposits
  • Shipping and Delivery Charges
  • Card Surcharges
  • Local Fees (e.g. bag fees or San Francisco Healthy SF)
  • or other Temp Charges you incur.


With these in mind, please share your thoughts on what's most important for your business:

  • How does the current feature set help your business, or what kind of workarounds do you have to enact to get the necessary result?
  • What improvements in reporting, application and refunds flow would make your life better?


Click Reply below to share your experience or post a question ahead of time, and we’ll address as many posts as we can on Thursday, January 27th!👇


We are not able to offer tax advice nor are we are not able to address issues related to specific payments, deposits, or account status details in our public forums. If you need assistance on one of those topics, please contact our Customer Success team and they'll be able to take a deeper dive into your account.


Tom [he/him]
Seller Community Manager | Square, Inc.
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Message 1 of 43
1 Best Answer
Community Team

Best Answer

Hello Everyone,


Thanks again for taking the time to share your questions and feedback!


We learnt more about your use cases and will continue to iterate based on your feedback. We are excited to hear you mention the need for time-based and item-based automatically applied service charges. These are on our roadmap.


If you have a unique workflow or business need with respect to these features or in general, please send a private message to @divyar


Again, thanks for your participation. For the latest updates, keep watch for announcements of new features in Product Updates.




View Best Answer >

Message 43 of 43

All of my clients have complained about us charging them a "processing fee". I am a specialized Marine mechanic, and I travel to where the vessel is located. All of my work is seasonal, which adds another issue with having to change everything to a monthly plan.  Since my clients have consistently complained about the added fee, I just don't charge them for it, but I can't even claim it as a business cost on my taxes. Then I also have the added fee of transferring the money to my business account at the bank. I chose square as my credit card processing because it was easy to use, not complicated, and I knew what fee's I was going to have to pay. Now I'm having to choose a monthly plan, as well as having to pay per transaction, and all with my having to "eat" the fee's without being able to use it as a tax write-off. What else is going to change? 

Message 2 of 43
Beta Member

the IRS will allow you to claim any and all banking fees you may have. Yes this does include the fee's from Square 

Travis Owens-Whitehead
Message 3 of 43
Community Team



Thank you for the feedback. I see your frustration with not being able to pass on the fee to your clients. I am interested to know how we can help you make this cost a tax write off. Can you elaborate on the gap here?

Message 4 of 43
Beta Member

I use Square for Retail and need to be able to apply a percentage based Re-Stocking Fee to returned/exchanged goods, especially when an exception to our return policy is made (ie outside the return period, refund instead of exchange or store credit, etc).  I see that Service Fees are available in Square but that app doesn't handle returns/exchanges as neatly as Square for Retail.  Not to stack the deck here, but it seems to me that there should be a single app that has features that can be toggles on/off according to a business' particular needs or subscription with Square.    I appreciate the service Square provides and the teams' dedication to continually improving the user experience. 

Message 5 of 43
Community Team



To be sure I understood your workflow, you would like to add a restocking fee on a specific item or a group of items when they are returned/exchanged. Do you expect this to auto apply on returns? Is the fee going to vary based on certain factors?  Thank you for this feedback and look forward to learning more on this use case.

Message 6 of 43
Beta Member

Yes, it would apply to certain items as a percentage of the pre-tax price.  It would NOT be an automatic fee, rather a fee applied at our discretion because we made an exception to a policy or the item(s) were special ordered thus incurring additional fees on our part to return to the vendor.  

For instance, we order a pair men’s extra wide shoes in size 15 for a customer who purchases the shoes, then returns them outside the stated return window.  We allow the return but must charge a small restocking fee (say 5%) because 1) we have to pay shipping both ways on the shoes 2) we have paid the vendor more for the item because it’s an At Once order rather than booked order, or 3) it’s beyond the vendor’s return window and we’re now stuck with a weird shoe size that we’ll likely have to eat the cost of. 

I hope that helps!

Message 7 of 43
Beta Member

Public Holiday Surcharges

It would be wonderful to be able to choose dates and times on a calendar, in advance, and have service charges apply automatically for those particular days ie.. public holidays and other days where there a service charge needs to apply. 

Then they automatically disable once the date/ time specified has ended.

This needs to happen for both POS and Online.

Message 8 of 43
Community Team



Thank you for the feedback. We are actively working on solving this.

Message 9 of 43

I run a Small Engine Repair and Service Shop, with on-site and Mobile Services.

It would be nice to have to option to calculate processing fees and charge back to customer on invoices. But then it would no longer be an expense, since the customer covers the cost. Downside is customers do not like to pay processing fees, in addition to shop fees, environmental fees, etc. So, I have simply added the cost of processing into my product and service pricing. By adding 3% to each item, I can recoup my processing fees. This also allows me to deduct those fees from my tax filings as an expense. I have also eliminated my environmental fees by wrapping it into the price of services where this fee is needed. This also helps in advertising, " No added fees" " Rock Solid Pricing"  My local competitors get nervous when I do this. 😂

Message 10 of 43
Community Team



Thank you for your feedback. Looks like you are looking to add a 3% charge on all your items by default. How do you see this charge presented in the receipt - As a separate charge with a name or wrapped into the item price? How do you see this in the reports so that it can be easily used for tax write off?

Message 11 of 43
Beta Member

It would be nice to be able to use the retail app to give a specific customer a coupon for future use. Plus making exchanges/store credit easier to manage. The ability to use the ecard for an refund is nice but it would be nice to be able to see it on the customers profile. 



Message 12 of 43
Super Seller

I say Bottle Deposits, Shipping, delivery charges, bag fees will all come in handy. But Card Fees (credit/debit, Apple Pay) are illegal in some states. In CA it is legal, but if you on clear signage mark that cash customers get a discount then it is legal, just like how gas stations do it in CA



Life is too short to eat boring cheese.
Message 13 of 43

When I add new items to the website, sales tax should be automatically applied, instead of having to go to "Sales Tax" and manually select it for new items.

Message 14 of 43

Interesting you have this problem.  Ours is the opposite.  I would like sales tax to Not be automatically applied as most of our items are non-taxable and it is always on unless we remember to go in and toggle it off.   So we need a way to choose whether we want sales tax to be automatically applied or not. Maybe it already exists and we just do not know about it? 

Message 15 of 43



Thank you for sharing your feedback. I want to make sure I am understanding this right. You are using Square Online website and when you create a new item, the tax rate does not auto apply to future items? We are working on a few of our omnichannel pricing and tax features so your feedback will definitely help.

Message 16 of 43

I run a cleaning business, and have thus far used Square for my appointments. My biggest issues are card processing fees, and a way to charge these fees to the customer. In addition, recently most of the features that keep me using Square are now in a subscription package that costs money. So, in addition to card processing fees, I need to either pay a monthly fee to use the features or find a different app/program all together. Considering the hefty charge for the subscriptions, I will be looking for another app/program. 

Message 17 of 43



Thanks for your question. If passing on a Card Surcharge is allowed in your area, have you tried manually adding it as a service charge?


I will pass on the rest of your feedback to my colleague on the Pricing & Subscriptions team.

Message 18 of 43

We apply a 3% service charge to one variably priced item in our store.  I would like if square would have the option to add a % service charge to that 1 item and not to the whole shopping cart. 

Message 19 of 43



Thank you for the feedback. We are actively working on solving this.

Message 20 of 43
Beta Member

Unless I'm missing something Service charge is useless for Bag Taxes depending on the state. In Maryland we have a $0.05 per bag tax which is a variable based on how many bags they want. Square service charge doesn't allow more than one per transaction which means I'd have to set up multiple service charges of $0.05 for one bag, $0.10 for 2 bags, and so forth and so on.


Currently I use an item called Bag Tax and don't apply tax to it.

It would be nice if I could have a service charge for bag taxes of $0.05 and that would let the cashier select the quantity to be applied to the check.




Message 21 of 43