We often get asked if it is possible to set up credit card surcharging in a restaurant. The answer is yes! Below you will find a breakdown of how the cardholder and the business owner get charged to run the transaction:

The 4% is charged to the bill amount, not the total sale with tip amount. Here is an example on a $100 sale.

This means the $100 sale will be charged $104 to the cardholder. If they add the $20 tip the total charge to the cardholder is now $124.

Because the 4% surcharge for the tip is not taken from the cardholder the merchant covers it which means the deposit they receive will be the $120 minus the 4% charge on the $20 tip ($0.80 fee). The merchant will receive $119.20.

CARDHOLDER PAYS:

$100 bill

+$ 4 surcharge cardholder pays

$104 bill + surcharge

+$ 20 tip entry

$124 bill + surcharge + tip

MERCHANT PAYS:

$20.. tip amount

-$0.77 surcharge merchant pays 3.846% surcharge

$19.23 remaining after surcharge on tip amount

TOTAL DEPOSIT TO MERCHANT:

$124 total charge to cardholder

-$4 surcharge drawn back for fees

-$0.77 surcharge drawn back on tip amount

$119.23 deposited to merchant bank account

As you can see the business owner pays a small percentage on the tip amount only - while still saving a ton of money on the total transaction!