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Archive for Sunday, August 5, 2012

Fee factor

August 5, 2012

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To encourage Kansans to renew their vehicle registrations online and perhaps ease the crunch at county treasurer’s offices across the state, the Kansas Division of Motor Vehicles has decided for the next year to waive the credit card and electronic check fees usually associated with online transactions.

Although DMV officials say the long lines at some treasurer’s offices are only a temporary problem, this seems a perfect opportunity to assess the feasibility of permanently waiving those extra fees.

The division has added a 2.5 percent charge when people pay with credit cards and a flat $3 fee for using an electronic check. There is no extra charge for people who pay by cash or check either in person or by mail.

Online renewal is available for any vehicle that has previously been registered at the same address and is covered by one of the many insurance companies on the state’s registry. Renewing online certainly is convenient for many people. However, only about 11 percent of the 2.4 million vehicles registered last year were online renewals.

It’s true that credit card companies charge the state for registration transactions, and a 2.5 percent fee probably isn’t a great deterrent for many residents. However, if state officials see a significant increase in the number of people registering vehicles online in the coming year, they would have to wonder if the credit card and check fees are a factor.

If someone is paying $400 to register a vehicle, the credit card fee would add $10 to the total. Multiplied over two or more cars in a family, that amount starts to add up and may provide some small deterrent to online registration.

What the state needs to consider is whether the administrative efficiency of handling registrations online saves it enough money to offset whatever money is lost by waiving the credit card and electronic check fees. Added customer convenience, both for those who use the online system and those who don’t, also should be part of the calculation.

After months of computer problems, shortened hours and long lines, the state’s vehicle registration system could use some good PR. Taking a look at eliminating extra fees for online registration might be a step in that direction.

Comments

PhilChiles 1 year, 8 months ago

"Convenience fee" is a bad name, but I get why they do it. 2.5% is right about the average that a lot of merchants pay every time you run a credit card anywhere else, so I really doubt they make any money off of the deal. Don't be surprised if more stores start doing this as well, to try to recover some of those hundreds of dollars a month that go to credit card companies.

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1 year, 8 months ago

Is anyone else annoyed by the $4.00 “modernization fee” per vehicle?

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KU_cynic 1 year, 8 months ago

I'm with you, none2. The DMV and DoR call it a "convenience fee", but I supply the convenience when I take care of it myself online, not the state.

Charge for in-person business that requires interaction with a government employee on government maintained real estate, and give those of us who are willing to cut out the middlemen a fee break.

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none2 1 year, 8 months ago

I am one of those who doesn't pay online because of the extra fee. Likewise, that is why I don't use the satellite county offices either. I believe there is a $2.00 fee for using those offices. The government gets way too much money as it is, so I won't give them a dime more -- even if it is a card fee.

I'm surprised that they don't charge for in person transactions. I would think over all the government workers spend more time on those transactions than are spent with the online transactions. It always seemed strange to me that they want to look over your drivers license when you pay, yet no such thing is required when you mail in the form.

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