Shipping costs are one of the chargeable expenses that can be well suited for a credit card. Next to advertising expenses, shipping charges are probably one of the biggest and most repeatable charges an ecommerce brand has to address every month.
Both FedEx and UPS accept credit cards as one of the approved payment methods in addition to the following:
Electronic Funds Transfer via a direct debit from your bank account.
A check sent through the US Postal Service with the UPS-provided statement.
A credit card: American Express®, Discover® Card, MasterCard®, or VISA®. UPS will only accept a credit card for payment of shipping charges and will no accept a card payment for duties and taxes.
Electronic Funds Transfer from your bank account to a FedEx bank account.
Direct Debit from your bank account by authorizing FedEx to pull payment via Direct Debit.
A check via mail with the FedEx provided payment summary.
A credit card: FedEx accepts all major credit cards.
When UPS or FedEx don't accept credit cards for payment?
Although both FedEx and UPS will accept credit card payments, there is a spending threshold where accepting a credit card will require corporate approval. In other words, if you’re shipping beyond a certain limit, they will sometimes not accept your credit card to pay for shipping charges.
Whenever you use a credit card, whether it’s a business card or a personal card, the merchant (in this case, UPS or FedEx) is charged a merchant processing fee to process the credit card. Both argue that this fee becomes too expensive beyond their established threshold. Nevertheless, if you intend to use a credit card to pay shipping fees, it’s worth talking to your representative to see if your anticipated spend is beyond the threshold or they are willing to make an exception in your case.
What to look for in a credit card to pay for shipping expenses
Credit card providers like American Express acknowledge that advertising, sales, and marketing are at the top of their list of growing credit card users. Part of the reason is because they recognize that many ecommerce brands use their credit cards to pay for repeating expenses like advertising and shipping. If you’re using a credit card to pay for shipping it needs to offer:
Multiple paths to approval/appropriate spending limits: They need to look beyond your credit profile and consider a number of other factors into a full credit review—your anticipated ad spend and shipping volume is a very important part of that.
An understanding of the unique needs of ecommerce brands: A credit card provider that understands ecommerce will help you address seasonal spending needs to maximize revenue-producing opportunities during your busy times of the year.
Competitive cash back: A card provider that is able to offer more than the typical 1% to 1-½% cash back on spend is optimal. Especially if they offer higher, or no limits, to the amount of spend eligible for cash back.
If you’re interested in learning how dash.fi can help your business optimize digital shipping expenditures, visit www.dash.fi to schedule a demo.