Make It Easy For People To PAY YOU!
I have been noticing more small businesses charging credit card usage fees. Business owners might think it’s standard business practice because every other business is charging a credit card fee (est 35% of small businesses according to a January 2026 JD Power survey). However, what if your business didn’t? Or implemented something less alienating? You would be setting yourself apart from the competition at that point!
As a small business owner, I get it. Credit card processing fees are generally in the range of 2.5% - 3% per transaction and the owner would love to have that money in their pocket for a variety of reasons. However, most consumers dislike paying a credit card surcharge and it could leave a negative impression on your final interaction. The goal should be to make the transaction simple and have the customer depart pleased thus increasing the chances they will buy from you again!
So, what can be implemented instead of charging a credit card fee?
Factor in credit card fees as a cost of doing business. You don’t charge customers a separate fee for napkins…or ketchup…or takeout containers…or electricity for lights; it’s all built into your operating costs so why not treat credit card fees the same way?
Set a minimum amount for a credit card transaction: example $10+. This way, the fee is not eating into profit margins on inexpensive items. —> one of my favorite tactics because it seems like a fair compromise for both parties.
Ask customers to consider paying with cash. People might have more compassion in this scenario than being obligated to pay a usage fee.
Offer a cash discount. This provides a positive spin that is much more acceptable to consumers than being charged an extra fee.
If you truly need the additional money to run your business, raise your prices. Using 3% as an example, a $5 item would need a $5.15 list price to cover the credit card merchant fee. Also, look at the makeup of your business’ payment transactions. Not all customers choose to use cards, so you might only need to raise your prices by 1.5% to cover all fees. I believe that while price increases are not great, this tactic will likely turn away fewer customers than a usage fee. People appreciate knowing the final price of an item.
Note: Credit card surcharges are banned in Connecticut and Massachusetts while several other states impose caps or disclosure rules. Check your state's law before implementing any surcharge. Rules differ for debit cards.
As a small business owner, make it easy for people to give you money! Contact me for tips on how to smoothly implement changes.
Being a financial advisor, I am always trying to help people save money and spend wisely. If you’re a consumer, let’s talk about how to avoid fees, negotiate fees, or offset them with smart credit card usage.
This blog is for general educational purposes and does not constitute specific financial, tax, or legal advice. Please contact our firm for precise advice applicable to your personal financial situation.