The Evolution of Pricing: Part 3 - Surcharge

Credit card surcharging is a practice many merchants have adopted to help offset the cost of credit card processing fees. When a customer pays with a credit card, the merchant adds a fee to the purchase. This fee is intended to offset the cost of the card processing fees that the merchant incurs when accepting credit card payments. Surcharges cannot be applied to Debit, EBT, or Gift Card transactions.

While surcharging is legal in most US states, merchants must comply with the rules set forth by the major credit card networks, and state laws regarding surcharging. These rules typically require merchants to disclose the surcharge to customers before they purchase and limit the surcharge amount to a certain percentage of the transaction amount.

Surcharging can be a valuable tool for merchants, but it is important to consider the legal and customer service implications before implementing it. Merchants who choose to surcharge must also consider the potential impact on customer satisfaction and loyalty. The additional fee may put customers off and choose to shop elsewhere, potentially costing the merchant business in the long run.

To help mitigate these risks, merchants can educate customers about the surcharge and its purpose. Additionally, merchants can implement a rewards program, increase customer engagement and offer other incentives to encourage customers to continue shopping with them.

Ultimately, the decision to implement a surcharging program is in the hands of the merchants. The savings can be significant if they can do so without losing customers. However, merchants must understand and be prepared to adhere to the rules set forth by the major credit card networks and state laws regarding surcharging before implementing the program.