Catering and Event Payment Processing: Deposits

Caterers only joined the tolerance table this year

This is the change most caterers have not been told about. Visa's Table 7-10 governs how far the amount you settle may differ from the amount you authorised. Through 20 February 2026 the list permitted to differ by up to 20% named taxicabs and limousines, eating places and restaurants, drinking places, fast food restaurants, beauty and barber shops, and health and beauty spas. MCC 5811, caterers, was not on it. Effective 21 February 2026 the table adds a US region row covering MCC 5811, 5812 and 5814 at up to 30%, while the 20% row continues to cover MCC 5813. For a caterer that is not an academic point: final headcounts move, bar consumption moves, and a function settled above the authorised amount used to have no published tolerance to sit inside. The table also states that the clearing amount and the authorisation amount must always match following a partial authorisation response, and for a commercial payables transaction completed with a Visa Purchasing Card. So the tolerance does not rescue a partially approved deposit, which is exactly the situation a corporate client's card is most likely to create.

Who is allowed to take the whole amount up front

A caterer taking the full fee months before the event is doing something the rules treat as a distinct transaction type. Table 5-21 states that only the following merchant categories may process an advance payment representing the entire purchase amount before the goods or services are delivered: travel and entertainment merchants; custom goods or services; a face-to-face environment where not all items purchased in the transaction are immediately available but will be shipped or provided at a later date; and recreational services or activities related to tourism and travel. It adds that the terms and conditions must specify the date of shipping of the goods or services to the cardholder. A bespoke wedding menu is a plausible fit for custom goods or services, and a hotel-style function package may reach the travel and entertainment category, but that is a determination for your acquirer rather than for you. Ask, in writing, which category your account is set up under and what the acquirer expects the contract to say. If the answer is that you do not qualify, the structure is a deposit now and a balance later, which is a partial payment, not an advance payment — and the two carry different receipt requirements.

What the deposit receipt has to say

Table 5-34 prescribes the content of a receipt for each of these transaction types, and the wording is specific enough that generic invoicing software usually fails it. For a full advance payment the receipt must carry the full cancellation and refund policy, including the date and time that any refund privileges expire without advance payment forfeiture; the advance payment transaction amount; the scheduled start date or delivery date of the goods or services; and the words advance payment or prepayment. For a partial advance payment the receipt must carry the full cancellation and refund policy with the same expiry date and time, the transaction amount, and the words advance payment, deposit or partial payment if there is a balance outstanding — with the word balance used where the full remaining cost has been paid. For cancellations, a cancellation confirmation is required. Separately, Table 5-20 requires express informed consent before an advance payment or partial payment to an agreement setting out the goods or services, the total purchase price, the cancellation and refund policies including the expiry date of cancellation privileges, your outlet location, and an address, email address and phone number for the cardholder to use. Most of a caterer's dispute exposure disappears if the contract and the deposit receipt simply contain those items.

You cannot simply add a charge afterwards

Events overrun, glasses break and guest counts climb, and the instinct is to run the card again for the difference. The rules are narrower than that instinct. Table 5-19 restricts amended amounts and delayed charges for loss, theft or damages to a named list of merchant types: aircraft, bicycle, boat, motorcycle and vehicle rental merchants, costume and formal wear rental under MCC 7296, cruise lines, equipment, tool, furniture and appliance rental under MCC 7394, lodging merchants, motor home and recreational vehicle rentals under MCC 7519, and trailer parks and campgrounds under MCC 7033. Caterers are not on that list. The table's all other delayed charges column requires that the charge be directly related both to the merchandise or services provided by the merchant to the cardholder and to a transaction in which the cardholder participated, and that the merchant provide the amended transaction receipt to support it. The practical reading is that an overage should be agreed and taken as its own transaction with the cardholder's participation, evidenced by a signed or acknowledged revised invoice — not silently appended to a card you already hold on file. This is general information, not legal advice (September 17, 2026).

The service charge on a banquet bill is not a tip

Catering contracts almost always carry a percentage service charge, and the federal wage regulations address that arrangement by name. 29 CFR 531.55 states that a compulsory charge for service, such as 15 percent of the amount of the bill, imposed on a customer by an employer's establishment is not a tip, and even if distributed by the employer to its employees cannot be counted as a tip received in applying the tip credit provisions. The same paragraph goes further and names the case directly: where negotiations between a hotel and a customer for banquet facilities include amounts for distribution to employees of the hotel, the amounts so distributed are not counted as tips received. Paragraph (b) adds that service charges and similar sums become part of the employer's gross receipts, and that where the employer distributes them to employees they may be used in their entirety to satisfy the monetary requirements of the Act. Two things follow. Your service charge is revenue, which affects how it is taxed and how it appears in your accounts, and it does not support a tip credit. If the contract also offers the client a voluntary gratuity line, keep it visibly separate from the service charge on the document and in the POS, because the distinction is what the regulation turns on. This is general information, not legal or tax advice (September 17, 2026).

What the programs cost, and the commercial card question

Corporate events are paid on corporate cards, and the corporate table is a different table. Visa publishes Commercial Card Present at 2.50% + $0.10 and Commercial Card Not Present at 2.70% + $0.10 for purchasing and corporate travel and entertainment cards, with Non-Qualified at 2.95% + $0.10. It also publishes Commercial Product Large Ticket at 1.30% + $35.00, which on a large function is a very different number — illustrative example, using only the published rates: a $40,000 event costs $1,080.10 at the commercial card-not-present rate and $555.00 under the large ticket program. Visa does not publish the qualification conditions for any of these in the interchange schedule; it points to a rate qualification guide that is not public, and large ticket programs generally depend on enhanced data being submitted. That makes Level II and Level III data the single most valuable question a caterer can put to a processor, and it is worth putting in writing before you sign anything.

About the rate tables on this page: Visa is the only card network that publishes a public US merchant interchange schedule, so the rate tables on this site are Visa-only. Mastercard, American Express and Discover do not publish an equivalent US merchant schedule, and their rates are neither shown above nor implied by these figures. Ask your processor for the rates that apply to each network on your account.