I have a thrift store where I sell product on consignment. My vendor brings product in for me to sell. I just purchased a POS system that includes the merchant fees in the price of the product. Therefore, when I enter the vendor's inventory in the POS system, I increase the price of their product by 4% of the product price to include merchant fees. The higher price is listed on the price tag. If the customer pays with a credit card, they pay the 4%, the price that is listed on the tag. If a customer pays with cash, they receive a 4% discount bringing price of the product to the actual price that the vendor was asking for the item. Example: A bookcase has a price tag of $104 which is $100 + the 4% merchant fees. If purchased with a credit card, the customer pays $104. So I have the journal entry for a credit card purchase as Cash $104 and Sales $100/Merchant fees payable $4. Is that right? However, on a cash sale, I am only collecting $100 from the customer which would be Cash $100/Sales $100, but my product is listed as $104 in my POS inventory. What do I do with the $4?
