Surcharging can be a controversial topic today. At face value, surcharging is a way for businesses to offset the fees they are charged by credit card companies. But surcharging can also be seen as a way for businesses to take advantage of their customers, by adding on an extra fee that the customer may not be expecting. In this blog, we discuss the pros and cons of surcharging, today.
This can be a particularly sensitive issue when the surcharge is not disclosed to the customer until the point of sale. For many customers, this creates a feeling of being “nickel and dimed” by the business and can damage the customer experience. On the other hand, surcharging is a perfectly legitimate way for businesses to cover their costs. Credit card processing fees can be significant, and surcharging can help businesses keep their prices low for customers who pay by check or ACH.
Ultimately, the decision to surcharge or not surcharge is up to the business. But it’s important to weigh the pros and cons of surcharging before making a decision, to ensure that you are making the best choice for your business.
Surcharging Best Practices
If you do decide to surcharge, there are a few best practices to keep in mind:
- Make sure surcharges are clearly disclosed to customers, both online and in person.
- Avoid surcharging more than the actual cost of credit card processing and handling fees.
- Exempt surcharges for customers using debit cards, charging a surcharging fee to a debit card is illegal and you can get in big trouble.
- Be consistent in surcharging across all credit cards. Do not single out certain cards for surcharging.
Surcharging can be a complex issue, but by following these best practices you can ensure that you are surcharging in a way that is fair to your customers and beneficial to your business.
Lockstep Receivables customers now have access to surcharging. Using Lockstep your client can opt-in to pay with a credit card or by ACH. For credit card payments, a modest surcharge covering the cost of the transaction processing fee and Interpayments fees will be added.
Get started today with Lockstep Receivables
If you’re ready to improve your accounts receivable process, we invite you to get started with Lockstep Receivables today. Our team of experts will work with you to understand your specific needs and implement a solution that meets your unique requirements. Contact us today to learn more about how we can help you optimize your accounts receivable process.