In this video I talk about why you should never charge an additional fee for accepting credit cards for payment from your customers. If you are doing this practice, I would highly recommend you stop it right now. Update: Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions. Minnesota prohibits a seller of goods or services that establishes and is responsible for its own customer credit card from imposing a surcharge on a purchaser who elects to use that credit card in lieu of payment by cash, check, or similar means.
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Do you want to know whether or not you should charge extra for accepting credit cards in your business. I'm going to tell you right now, you don't, and in this video I'm going to explain to you why! Are you ready? Let's go!
Hi there, my name is Matt Ward and I help service based business professionals, get more word of mouth referrals and their service based business. Thank you for watching the video I hope that you subscribe and click the bell so that you don't miss a single video that I put up on the channel. Now, let's get to the meat of it. Should you or should you not charge for accepting credit cards, meaning that when a customer comes to do business with you, should you charge x fee for the service, and then an additional fee for accepting credit card for payment for that service. The answer simply put, is no, and here's why. Because you don't want to nickel and dime, your clients and customers to death. It bugs them so much when you do this, and it keeps them from referring more people. If you want more word of mouth marketing and more word of mouth referrals in your business, then you want to roll that charge into the overall cost of the product or service that you're selling.
The problem is when you don't you're moving that out and you're saying, I'm going to charge you this, I'm going to charge you this and the question I have for you then is, then why wouldn't you charge me for one service here for the credit card charge here, for the gas it cost you to get to your office to the coffee in your office, for the water in your office, for the water bill you pay. It's just ridiculous, but people don't want to know that they're paying for you to go to lunch with someone else. But the reality is a small business owner that's exactly what they're doing, because you're charging by the hour for instance and you're charging $150 an hour. We know... the buyers know it doesn't cost you $150 an hour to do that work. There's profit built in there. There's overhead built in there, their staff built in there, there is software built in there. There's your vehicle payments built in there, your lights, all these things that roll into the overhead of running your business. So why would you separate out a credit card fee. You know how difficult that is for somebody to stomach they just want to pay the fee. I've had this come up numerous times with different types of service providers recently for one instance. Somebody told me about a story about dry cleaning they went to pick up a $3 dry cleaning order and they wanted to use their debit card. They don't carry cash. Right. And the, the service business the dry cleaning business wanted to charge an extra dollar for that transaction. Now, look, I get the fact that if they charge $3 for three shirts a dry cleaning. And then they have a 35 cent charge. And then, for taking credit cards and probably a 3% roughly on average payment that they're making percentage of those $3, then it's like six cents for the 3%. And it's like 35 cents for the transaction so it's like 40 cents out of $3, and I get that that's a large percentage of their actual of the actual bill.
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