To dream for free money as Patti Smith sings is probably not possible in today’s economic and competitive world. Credit cards might seem like a comfort, but it comes with extra charges to pay. These extra charges are not only a burden for customers, but also for retailers. Credit card surcharge is the additional amount of money charged by the retailer when a customer pays through credit card for any purchase. This makes even a cheap service or product seem costly for customers. For merchants, it only increases the risk as their customers might not buy from them the next time.
How retailers tackle credit card surcharge fees?
Many laws have been passed to regulate credit card surcharge fees. Retailers are allowed to charge customers for the card processing fees that are charged by the credit card companies such as Visa, MasterCard, etc. However, retailers must make sure to inform customers about the additional charges before payment and mention it in the payslip as well. Now merchants must remember that adding credit card surcharge fee comes with its own risks. According to a survey, two-thirds of retailers prefer not to charge these fees. This creates a risk of losing out on your customers as customers would chose to save money. So they will probably buy products or services from your competitors who do not charge surcharge fees. Thus, your firm’s reputation and place in the market would go down, costing a big loss to your business.
Risks of passing the burden to the costumers
There are various ways to deal with this risky situation. You can take different turns to earn extra money in order to pay processing fee charged by the credit card companies and at the same time retain your customers. One way is to increase the price of your products or services. This might affect your place in the market if competitors charge a lower price. Make sure the prices are not too high. You can offer discounts and deals to customers if you decide to charge the surcharge fee. This way, the customers would probably not pay attention to the additional charges as they get lured towards those attractive offers. This not only reduces the risk of losing customers and loss, but also increases your level in the competitive market. Free gifts can also be offered. However, discounts can also affect your earnings and productivity. Well, everything has its own two sides. So choose whichever trick suits you best or you can just stick with simply charging surcharge fees. Make sure the amount of fees charged is reasonable and fair.
Many retailers charge a higher percentage of surcharge fees than what actually costs them for card processing. Every consumer must be aware of credit card surcharge laws. As a consumer you have all the rights to question the seller if you feel like you are being charged too much. Retailers must stick to rules and serve customers in the best way to make more money instead of charging high credit card surcharge fees.