A credit surcharge, which is also known as a “checkout fee”, “or free credit card processing” is
an extra fee that is added at checkout by a merchant when processing a payment by credit card.
This process can help business owners reduce merchant provider costs by charging the card
holder directly.

The Surcharging Process

The surcharging process is generally straightforward. For example, say your credit card
processing fees are 3.84% and you enact a 4% surcharge to a client (the maximum allowable
surcharge). The point of implementing surcharging is to offset the processing fees by passing
them on to the cardholder, where the business owner can essentially break even on processing
costs, thus saving on every transaction carried out.

How Can Surcharging Benefit Your Overhead?

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. Implementing surcharging can help a
business owner break-even passing fees onto the cardholder.

Is Surcharging Legal?

There may be some speculation as to how legal this service is, granted a business owner is
passing off merchant fees to the cardholder, and the apprehension is justified. While surcharging
is legal in the United States, certain regulatory laws vary from state to state that prohibits certain
business owners from utilizing this service. It is also important to note that surcharging can only
be used on Credit Cards and not Debit Card transactions.

While Surcharging is still illegal in a few states, it is best to consult with your Merchant provider
to see if it is available in your state. It is also important to note that if you are using surcharging you are legally required to inform the cardholder.

Is Surcharging Right For My Business?

While surcharging offers a variety of benefits, it is not a perfect fit for all businesses. Across
most industries it is a common theme for businesses with higher-priced items such as medical
practices, utilities, auto repair shops to utilize surcharging.

4% is the maximum surcharge amount that any merchant may charge a consumer, and whether
your average sale is $5 or $500 that 4%, surcharging can make all the difference when it comes
to breaking even on credit card processing fees.

Contact Beacon Payments

For more information about Beacon Payments and our solutions visit our main service page. For more information on Surcharging, Cash Discounting and Free Credit Card Processing give us a call at 877-986-4445 or contact us online!