“The times they are a changing” as a classic Bob Dylan song goes. When it comes to credit card processing, this certainly holds true. In the past, businesses were not allowed to charge their customers for paying with credit cards. Today that is no longer the case. As a result, many businesses are struggling with whether they should issue a credit card surcharge to their customers. So should your business do it? What do you need to know if you’re considering doing this?
Beware Of The Risks – The ability to charge new fees to cover your costs may sound like a great idea. However, to your customers this may be a turnoff. Since merchants have been paying thecredit card processing fees, consumers don’t see any benefit as to why they should start paying for it. There is a strong risk that you may alienate your customers and drive them away into the arms of your competitors.
Know The Requirements – There are strict guidelines your business must follow should it decide to make customers pay a surcharge. For example, your business simply can’t issue a blanket fee of, for example, 6%. The surcharge fee cannot exceed the transaction fee charged by the credit card company. In addition, many states prohibit a surcharge from being added.
Business Opportunity – If your business decides to have customers pay a surcharge, this can actually be presented as a deal. This can be done by offering discounts to customers to pay with a debit card or with cash as opposed to paying with a credit card. The customer may view this as a deal which increases loyalty to your business.
Even though merchants are now given the opportunity to have customers pay a surcharge for paying with a credit card, not many merchants are opting in. However, should your business decide to go down this route then tread carefully and you could turn this into an opportunity.