This is the Beacon Payments blog. Learn about the credit card processing and the merchant services industry. Hear about the successes of our outside sales people whose job it is to sell merchant services and sell credit card processing programs.
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:
If you are a business owner looking to reduce overhead costs and reduce monthly spending, surcharging is a great alternative to help offset any credit card processing fees...
When a business owner wants to charge their customer a 4% surcharge then they need to pay a 3.84% fee to their processing company to guarantee the charge is being properly offset.
Look at the following examples:
The merchant runs the card for a $100 sale. The cardholder is then charged a total of $104.
If we then take 4% out of the $104 transaction the business owner will pay $4.16 in fees - an effective rate of 4.16%
$104 * 4% = $4.16
$104 - $4.16 = $99.84 deposit
If we instead take 3.84% of the transaction out then the business owner pays $4.00 in fees on the $104 sale.
$104 * 3.84% = $4
$104 - $4 = $100 deposit.
This ends up being a 4% charge on the original $100 sale. The business owner is charging 4% to the client and exactly 4% is being paid to offset by the 3.84% processing charge.