This Episode: Should Retailers Charge Customers Credit Card Fees?
In this week’s Real Retail TV, I’m going to cover the controversial topic of credit card fees. Should independent retailers be passing along these fees to their customers? The short answer is no. It’s your #1 competitive advantage to be able to provide an incredible in-store experience. And no matter how wonderful your sales staff is or how perfect your merchandise is, when a customer goes to pay and sees that they’re being charged a credit card fee, they’re going to feel like they’re being nickeled and dimed. Even if they don’t say anything in the moment, there is a big chance that they just won’t return to your store. Save yourself the trouble and treat credit card fees like you would any other business expense.
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We had a credit card processing company offer this option to us years ago. We choose back then to NEVER go down this road. It is simply a cost of doing business. We sell boats, expensive boats. Our products are a want, not a need. We want our customers to have their buying experience with us be the nicest, easiest most memorable one they have ever had. We are certainly not going to ask them to pay extra for using a credit card. We do have a maximum amount that we will accept on a credit card and so far, our clientele has been fine with this. Adding on the fees or doing anything that causes the use of credit to be more costly to the buyer is just not a good business practice. Find another way to make up the difference if you must.
Thanks for sharing your experience, Mary!
Well said Bob. And let’s be honest people: credit card fees are a cost of being in business and as such are already being paid for by your customers when they buy your goods. That is what the markup is for. If you don’t feel like you are making enough to pay credit card fees, raise your prices.
Thanks, Kathi. Also well said by you!
I agree with you on not charging an extra fee especially for smaller retailers, but your clients should be aware there is a bi-partisan bill introduced in the Senate by Senator Durbin D-IL and Senator Marshall R-Kansas called the Credit Card Competition Act. Your clients can get more information at NRF.com/fedupwithfees . The bill would allow retailers to choose at least 2 processing networks to process their transactions. These networks would then have to compete for the processing business. Currently, Visa and Mastercard force retailers to process only over their network and charge duopoly like fees called interchange fees. Your clients can add their voice to this conversation by going to the NRF site for more information and lobbying their Representatives.
Thanks for sharing, Robert!
Thank you for assuring me I’m making the right decision! Now, should I make it known that I don’t add the fee (IG post, sign at the register, etc) or just quietly go about keeping my customers happy?
Hi Laura. Up to you of course. If you already post a sign about forms of payment accepted, you might update it to say “All credit cards welcomed without fee” which is a gracious way to inform your customers.
I agree!!!
Thanks for the comment, Neil!