passing on merchant fee onto a customer

[boston09]

i still pay myself and i believe its a good business practice to pay and budget for it and just increase prices say 3-4 percent to cover it .. but lately its becoming more common and offered by my pos and online ordering system to pass on the expence onto consumer... from what i heard from another pizza operator - noone has complained since he implemented a 4% surcharge if customer chose to pay for the order by a credit card.. is someone here can share their experience..? did u start charging ppl for using a credit card? how did ppl react to it or even noticed it? have you lost customers because of it?

 

[chefmattboz]

I have been adding 3% through Toast since November and have had 2 people complain and pull out cash. Several customers told me they were surprised I didn't do it sooner since everyone else does it.

Matt

 

[Tom-CC]

i still pay myself and i believe its a good business practice to pay and budget for it and just increase prices say 3-4 percent to cover it .. but lately its becoming more common and offered by my pos and online ordering system to pass on the expence onto consumer... from what i heard from another pizza operator - noone has complained since he implemented a 4% surcharge if customer chose to pay for the order by a credit card.. is someone here can share their experience..? did u start charging ppl for using a credit card? how did ppl react to it or even noticed it? have you lost customers because of it?

A few important points to keep in mind if you’re considering implementing a surcharge program and want to remain compliant with Visa, Mastercard, and applicable state laws:

1. Surcharge Limit: Visa caps the maximum allowable surcharge at 3%. This rule has been in place for about two years.
2. Cost-Based Cap: Your surcharge percentage cannot exceed your actual processing cost. For example, if your effective rate is 2.5%, that’s the maximum you’re allowed to surcharge.
3. Customer Notification: You must provide clear signage or notification informing customers of the surcharge before they make a payment.
4. Receipt Transparency: The surcharge must be listed as a separate line item on the customer receipt and must be passed to your processor accordingly.

---

Alternative Recommendation:
I typically advise my clients to consider the Cash Discount/Dual Pricing model instead. Unlike surcharging, this approach includes the cost of card processing in your listed prices and offers a discount to customers who pay with cash. Since this model is structured differently, it generally falls outside Visa and Mastercard's surcharge rules—reducing the risk of non-compliance or fines. Also, cash discounting is a markdown in price, while surcharging is a markup in price, so the former is better from a marketing perspective


If you have any questions , let me know