Is it time small businesses add a surcharge?
With card transaction fees constantly creeping up and small businesses looking to cut costs after a tough 2020/21, more business are choosing to add a surcharge and pass on the cost to customers. Others are holding off for fear of losing customers.
But should they be worried, or should they go for it? And more importantly, should you?
If you’re unsure about adding a surcharge, here’s some simple advice to help.
How to work out if adding a surcharge is right for you
1. Do some legwork
Visit other shops in your area and find the ones that surcharge. Ask them about their experience and if they have recommended surcharging to any other businesses.
If you want to start your research right now, check out some of the SmartPay customer stories, including those from restaurants & cafes, butchers, hairdressers, pubs and surf clubs.
Retailers who surcharge report saving thousands of dollars every year – and can achieve that without losing customers.
2. Work out the cost of not surcharging
Take out a pen and paper and work out what not surcharging is costing you. Don’t stop at your bank fees either. Think about the time you spend reconciling confusing bank statements, the sales you might have lost because you didn’t offer a specific type of card, etc.
3. Consider how you might use any savings
An improved cash flow is just your starting point. Think how you might use these new funds. You might pay other bills and or use it keep prices down. You also might use it to attract more business by advertising, improving facilities or your products. One Smartpay customer even used the savings to invest in a customer loyalty programme.
4. Test it with your customers
If you want to know if surcharging is right for you, then this article will tell you more about how easy it is to set up.
This article has been republished with permission from SmartPay.
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If you would like to know more about what level of surcharge is permitted then please read our article on Surcharging and the Cost of Acceptance.
As part of Merchant Advisory’s Payments Optimisation Review service we look at the potential impact of implementing surcharging on sales and cost reduction. If you would like advice on this topic, then please contact us.