Surcharging is now legal across nearly all states, so merchants no longer have to watch a significant percentage get siphoned away from every credit card transaction. They can instead pass those fees along to customers who elect to pay by credit card, with full and fair transparency. Since they won’t have to raise prices to compensate for merchant fees, businesses that surcharge may help to reduce consumer price inflation. That ultimately benefits both businesses and their valued customers. But some business owners still wonder whether or not customers will accept a surcharging policy without hesitation.
Weighing Pros and Cons
The answer probably depends on how those businesses gauge customer expectations, and whether direct competitors in the same market also surcharge. In a market where direct competitors don’t pass merchant fees along to the customer, surcharging could motivate customers to shop elsewhere. That’s because they realize they can buy the same product or service elsewhere, without paying the added surcharge. In that case, a merchant may decide to postpone surcharging to retain those price-sensitive customers. But it is also possible that simply encouraging those customers to pay with a debit card or cash, which will not result in a surcharge, may resolve that issue.
Customers Who Feel it’s Unfair
There are also situations where customers may feel that having to pay a surcharge for the convenience of using their credit card is unfair. They may perceive it as a punitive merchant policy. When in doubt, businesses can make a more informed and insightful decision by first gauging customer sentiment and sensitivity toward surcharging. It’s helpful, for example, to do research or survey other businesses and determine how widespread the practice of surcharging is within the target market or local area. If it has become commonplace, consumers will likely be accustomed to paying the surcharge, and will be fine with it. Customers may actually appreciate the fact that surcharging by merchants in their community can help to reduce inflation across the board, which is ultimately in the consumer’s own best interest.
Eliminate Credit Card Processing Fees Today
How Surcharging Levels the Playing Field
Merchants collectively spend approximately $80 billion a year or more in credit card processing fees paid to companies like Visa and MasterCard. Then those giant companies can turn around and invest that money to offer credit card rewards programs and cash-back incentives that might not otherwise be sustainable. But merchants can now use surcharging to fight back and hold on to their hard-earned revenues. They can reinvest that saved revenue to incentivize and reward their own customers. With surcharging, merchants pay zero transaction fees while they retain 100 percent of each sale. Because surcharging can instantly boost net profitability by eliminating pesky merchant fees, it’s an ideal solution and a no-brainer for many businesses.
How to Ensure Legal Compliance
But as Entrepreneur Magazine emphasized, it’s best for businesses that take advantage of surcharging to use an automated payment processing solution that ensures full compliance with surcharging rules. Those rules are complicated, and merchants who don’t strictly follow them may be fined and risk losing their ability to accept credit cards. But affordable, turnkey plug-in solutions are available that provide total compliance, regulatory documentation, and a seamlessly smooth merchant and customer experience.
Contact NTC Texas today to learn more about zero cost credit processing.
