More on Service Fees: What States Have Different Requirements and How to Collect

Whatever you call them—service fees, professional fees, a retainer—fees have moved to the forefront of the conversation within the travel advisor community, perhaps more now than at any time before.

With commissions harder to come by, and bookings still on hold because of the impact of COVID-19, more and more advisors are looking to fees as a business strategy necessary for the new world.

Attendees of ASTA Global Live this week were able to get the facts about fees during a session called Professional Service Fees and Additional Agency Revenue Opportunities. The session, hosted by TMR’s Daniel McCarthy, featured Rick Ardis of Ardis Travel; Bill Coyle of KHM Travel Group; Betsy Geiser of Uniglobe Travel Center; Tiffany Hines of Global Escapes; and Heather Kindred of Travel Leaders of Tomorrow.

Aside from the reasons why fees now make sense for a lot of agencies, and tips about how to break the news to clients of the new service charge, the session also covered important topics that may have previously given advisors some pause about fees—mainly, what a state might legally require an advisor to have in place before charging fees and what to use to actually collect the fee from your client.

What states have different requirements
“There are currently six states that require a seller of travel license,” Kindred said.

If you live in, or sell to, clients in California, Florida, Washington, Delaware, Iowa, and Hawaii, collecting money for travel requires a seller of travel license that you must obtain before you’ll be able to start including fees.

According to Kindred, California is the strictest, though there are exemptions including if your host agency has a California seller of travel license, and you run all transactions through them and their point of sale system.

“Keep in mind, states change their policies so do your research,” she said.

Advisors from those six states need to learn the restrictions from their state, get a seller of travel license (SOT), and get a point of sale app (more on that below).

Florida, for instance, requires advisors to register annually with the Florida Department of Agriculture and Consumer Services (FDACS), which is authorized to collect registration fees and impose penalties for noncompliance with the law. The annual fees for the Florida SOT license is $300.

California, on the other hand, requires an annual registration fee of $100 for each business location, paid through an online application located on the state’s Office of Attorney General website.

What to use to collect your fees
One of the most common questions with new advisors looking into fees is how to collect them from clients.

ASTA member and partner National Transaction Corporation is one available product, but there are others that advisors might be more familiar with in their daily life including Paypal, Square, and Stripe.

There’s also your local bank, Kindred said, which may have a payment processing application you’ll be able to start using that’s already linked to your back account.