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Too good to be true?

Illustration of car approaching a toll booth with a sign that says to inquire within for the price.

Dear Tuppence,

What gives! I found an online giving service (Flipcause) that guarantees a 1.5% transaction fee. That's so low! Should I jump on it?

—Janet

Janet, as is sadly the case, an examination of the fine print will lead you to a not-so-fine truth. In the case of Flipcause, let's take a look at the promise and the clickable details.

First, this is what their site says (as of June 2019):

Industry-Low Guaranteed Rates

Looks great! But if you click on the "Learn More" button, you discover this:

Rate Guarantee Details

Now mind you, I am just a chihuahua, but even I can see something funny is going on here. Allow me to translate the above in actual English:

We require you to give donors the ability to cover the processing fee at checkout. Then, when your donors click to cover the fee, we nail them with a 4.9% processing fee, one of the worst in the industry. If donors do not opt to cover the fee, we charge you 4.9%, but we credit you the difference so that your nonprofit pays 1.5%.

Flipcause appears to be banking on the idea that either:

Nonprofits are selfish and greedy

or

Customers won't click to see the details, and if they do, that they won't understand them

My experience is that nonprofits are hardly selfish and greedy (by nature, they are quite the opposite). So, this must be about banking on sliding one past folks.

The fact is, if you give donors the ability to pay the fee, many will. They'll do it if the fee is 4.9% or if it is 2.2%. So, you can get an effective 1.5% (or less) fee with GivingTools or many other services.

My little chihuahua heart goes out to all those who sign up for services based on promises that are not substantiated by the small print. I see it again and again when I use my little virtual shovel to dig around the Internet.

Janet, that rate is too good to be true. Thank you for asking!

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