Payment processing costs are incurred from a transaction regardless of the payment method used. For example, payments processed onsite at school, staff spent time collecting checks and cash, recording payments, issuing receipts, and depositing the funds at the bank are all transaction-related costs. Likewise, when payments are collected electronically via credit/debit card, transaction fees are paid at the time of the purchase as the card brands, banks, gateway, and processor all have costs. Since schools are required to collect the College Board’s money for them, schools bear all payment collection and processing costs.
For a school processing payments onsite at school, when a refund is processed, the school does not recover the staff time incurred with the initial payment. Similarly, when refunds are issued via credit card, the transaction costs for the initial payment are not returned as everyone did their work with the initial transaction.
Schools using Total Registration payment processing have transaction costs deducted from collected payments. Many schools opt to pass these transaction costs on to students/families by increasing the exam fee to $98.00 or more for the $94.00 list price of the AP exams.
When refunding exam fees, schools have two options regarding transaction costs:
- School pay payment processing fees – By refunding the entire amount of the initial payment. (setting the cancellation fee to $0.00 when canceling an exam in TR)
- Families pay processing costs – By setting the cancellation fee to a nominal amount when canceling an exam. For example, schools that charged $98.00/exam may assess a $4.00 cancellation fee, so the family is refunded the $94.00 exam fee minus the $4.00 transaction cost.
If schools select option 2, it is imperative they communicate the school’s transaction fee policy to families before processing cancellations. Schools should set the modified cancellation fee on the Payment Info screen so students see the expected cancellation fee at the time of requesting canceling their exam registration. See https://support.totalregistration.net/hc/en-us/articles/360045775653 for more information.
Fortunately, schools retain $9.00 of the exam fee (College Board invoices $85.00 ) for students who paid the full $94.00 exam fee. Many schools use a portion of these funds to cover the exam administration/proctoring costs. Since the College Board is delivering the 2020 AP exams online this year, there will be no proctoring expense for schools so the $9.00 retained by the school can help offset some of the payment processing and administrative costs.
For schools that collected payments themselves onsite, staff will spend more time to issue refunds and there may be additional costs such as check stock, envelopes, stamps, etc.. The good news for schools having TR process payments is there are no additional fees for processing refunds. TR absorbs refund processing costs.