As a business owner, you may have heard about surcharging. This is a small extra fee that you place on the transactions of customers who use credit cards. It’s a popular practice, but is it right for you? Here are a few questions to consider before implementing a surcharge on your customers.

What state do you operate in?

You must be mindful of the laws your state has that might affect your ability to impose a surcharge. Currently, there are a handful of states that have a ban against surcharging. Puerto Rico also prohibits businesses from surcharging credit card users. Even though surcharging is perfectly legal in most states, it’s still a good idea to check your state laws to see if there are any additional regulations that you must follow. There are no states that permit merchants to surcharge debit card users.

Which credit cards do you accept?

Most credit card companies require you to notify them before implementing a surcharge. Check for how much notice you need to give the credit card association and acquirer before the surcharge takes effect. You will also need to put up signs announcing to your customers that they will be charged for paying with a credit card. If you have a website, you need to also include this information on your website. Regardless of the credit card company you use, you must also use a point of sale terminal that records the surcharge properly and prints the detailed fee breakdown. Make sure that all of your receipts display the surcharge separate from the base price and total price.

What kind of business do you operate?

A wide variety of businesses have started surcharging, but the practice is better suited to some businesses than others. If you own a small business, a surcharge could help offset the high credit card processing fees. Surcharges are especially common with independent retail venues and small restaurants that aren’t part of a chain. Big retailers don’t have as much of a need for these small additional fees.

Do you have high credit card processing fees?

Do you dread paying your credit card processing fees? Are these massive fees cutting into your already slim profit margins? As long as you’re taking credit cards, you’re going to have to deal with these fees. However, you can’t afford to not take your customers’ credit cards. They are too much of a convenience for your customers when they are purchasing your merchandise or services. Surcharging is the solution to this problem. Most of your customers won’t think twice about paying the small convenience fee if it means paying with plastic.

If you decide that implementing a surcharge at your business is right for you, Wholesale Payments Direct can help you get started. We’ll provide you with everything that you need to impose a surcharge, including the necessary equipment and signage. Questions? Call us today! We’d love to answer them!