A merchant surcharge is an additional fee that businesses may charge when customers choose to pay with a credit card. This fee helps merchants cover the cost associated with processing credit card payments. Our Merchant Surcharge fee is 3% of the total sale being charged to the customer.

At Cost Advisor, we exclusively represent CardConnect/Fiserv for processing financial transactions such as credit cards, debit cards and ACH payments. Our merchant facing portal is CardPointe. Within this portal, we can always keep our merchants 100% compliant. The regulations surrounding this topic are rapidly evolving and it is essential that our merchants always remain protected from liability. Currently, merchant surcharging is not allowed in Connecticut, Massachusetts, Puerto Rico and Armed Forces Locations (Domestic, EU, Pacific and US – AA). As a result, any customer that presents a credit card with a registered address in one of these locations is NOT allowed to be surcharged. CardPointe screens all customer cards that are entered into the system to ensure compliance. If there is a conflict, the system will not surcharge that card.

Is this right for my dealership?

Many factors should be considered before implementing a Merchant Surcharge Program. It ultimately boils down to weighing the pros and cons of those factors when considering the program for your specific situation.

1. Evaluate Customer Impact: Consider how your customers might react to a surcharge. In industries where high-ticket items are sold, the additional cost from a surcharge can be significant. Transparent communication about why the surcharge is being implemented can help mitigate negative reactions.
2. Cost vs. Benefit Analysis: Analyze the financial impact of accepting credit cards without a surcharge versus implementing one. Consider the processing fees you are paying and weigh them against the potential impact on customer satisfaction and sales volume.
3. Competitive Positioning: Look at what your competitors are doing. If other local dealerships do not add surcharges, implementing one might put you at a competitive disadvantage. On the other hand, if surcharges are common in your market, customers might be more accepting.
4. Clear Communication: If you decide to implement a surcharge, communicate clearly and transparently with your customers. Explain why the surcharge is being added, how much it will be, and on what types of payments it applies. This can help maintain trust and prevent customer dissatisfaction at the point of sale. Written communication of the fee is mandatory at the point of sale and at the entrance of the dealership.
5. Consider Alternatives: Evaluate other ways to mitigate transaction costs, such as offering discounts for cash payments or using different pricing strategies that might absorb or offset processing fees more effectively.
6. Technology and Compliance: Ensure your payment processing system is equipped to handle surcharges correctly and that it remains compliant with payment network regulations as well as local and federal laws.

Discussing these points with an industry professional can help your dealership make an informed decision about whether to implement a Merchant Surcharge Program.

If you have any questions about merchant surcharging or if it is right for your dealership, please contact Bill Brudenell at 847-505-9210 or Bill@CostAdvisor.us.