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Readers weigh in on charging credit card fees

Real Issues. Real Answers: Charging Credit Card Fees

We asked our readers to complete a brief three-question survey and share whether or not their company charges to accept credit cards, and what the impact has been. More than 190 readers took part in this month’s survey about charging credit card fees.

First, we asked how many of our readers already pass along credit card fees to their customers. Of the more than 190 respondents, 63% said they do not. Just over 35% indicated that they are already passing along credit card fees, and 1.5% said they don’t accept credit card payments at all.

Next, we asked our readers how they would respond to the question we received from the dealer who asked…

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“We sell to both builders and homeowners, and we’ve accepted the major credit cards for years. We figured that the benefit from the improved cash flow would outweigh the credit card fees. But with so many of our expenses going up— especially salaries and materials, and with more customers paying by credit card, we’re thinking of adding a surcharge or ‘convenience fee’ just to cover our hard costs. We’d love to hear what other dealers are doing to offset their credit card processing fees—and if there’s been any pushback from customers.”



“Generally, customers will object to added fees, but won’t notice much if the overall cost is 3% higher. Obviously, some commodity lines are more sensitive, but as a broad brush, price your product to cover your costs (all of them) and meet your profit goals.”

“I am listening with you. We are also thinking of adding a ‘convenience fee.’ We were thinking of a fee of $2.50 per credit card use.”

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“We have changed our policy on paying house charge accounts with credit cards. We now allow them to use the card but charge a 3.5% surcharge. Other than that, we are charging no convenience or surcharge fees.”

“We are also considering a credit card surcharge and will be interested in seeing the results of the survey.”

“We accept credit cards without fees for non-charge accounts. If a charge account customer wants to pay their account with a credit card, then we add 2%. We have been doing this for three to four years now. There were a few who questioned it at first, but now there are no issues.”

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“This question could easily have come from us. We’re experiencing the same issues and hesitate to move forward with adding a surcharge or convenience fee only because we fear backlash from our customers if we’re the only yard doing so in our area.”

“We have added 4% to any invoice transaction paid by credit card. It’s important to be fully transparent with all your customers about why this fee is being added so they have a choice to pay with cash or check. And this is NOT a fee charged by the credit card companies (if called they will deny they are doing it). This fee is being charged by the companies processing the transactions. This is a common misunderstanding!”

“We’re in the process of investigating and potentially adding a ‘convenience fee’ for credit card utilization, but only for our open line of credit customers who pay, or want to pay, their A/R balances via a credit card. We are not looking to assess an additional fee for the over-the-counter sales. Regrettably, we have permitted the use of credit cards to pay off A/R balances and it keeps growing, so assessing a fee going forward will absolutely run into resistance and lead to disgruntled customers. Unfortunately, the expense associated with credit card fees has grown to be one of the most significant line-item expenses on our P&L.”

“We posted a 3% convenience fee years ago and tried to get the larger retail transactions with it, but got a lot of push back. We just increased our margins on retail to cover the fee. For charge account customers that ask, we do tell them we accept credit cards, but there is a fee. All but one just kept writing checks.”

“We charge 3.5% for credit cards. If the customer wants to pay in person with a debit card using their pin, there is no fee (this method only costs us .50). We also accept checks and cash.”

“At this time, we are searching for an answer to this question as well. We have not formulated a final plan yet. The main options we are looking at are meeting with the customers on a one-on-one basis, raising all prices on a small basis to cover our cost, or adding a convenience fee/service charge. We haven’t checked the last option but understand there may be specific laws governing what can be done as far as fees or service charges.”

“We charge for fees now 3.5%”

“We do not currently pass along any kind of surcharges but are certainly considering it.”

“Would like to start charging fees but our POS system doesn’t support that option.”

“Raise your blind item prices.”

“We will begin charging a 2.5% surcharge.”

“I am not good at giving advice. I can say that we are thinking of adding a 3% or 3.5% convenience fee when customers pay their monthly statement with a card. We are still on the fence about adding the fee on cash sales. I see some of our competitors add these fees.”

“We have been having similar discussions internally. While seeing that large expense month over month is tough for us guys our competitors are scoffing at it. That’s the rub we have of not losing to another Box Store. Would love to hear everyone’s feedback and ideas.”

“We communicate with account customers and then we charge 3% convenience fee. For the most part that’s the end of the discussion.”

“Just build it into the price of the product. The majority of our business is done with credit cards (70-80%). If you add anything, give a discount for paying cash (2.5%).”

“Unfortunately, where we are it is illegal to add surcharges, and the allowed convenience fees are so small it wouldn’t make a difference.”

“I would not recommend adding a surcharge. Customers may reconsider doing business with you going forward. Credit card fees are the cost of doing business. Maybe consider providing a discount for those that pay with cash.”

“We would like to do the same by adding a 3% convenience fee.”

“We are a net 10 company, and we do charge credit card fees on all cash sales, but we make an exception with our builder accounts. If they pay in full by the 10th (due date), we eat the fee. If it comes in after the 10th, we charge a 2.5% surcharge for all card-based payments.”

“We only charge the credit card fee to our AR/credit customers when paying on their accounts. We do not charge our walk-in traffic for counter sales transactions.”

“At this time, we have elected to charge the fee to every cash sale transaction and charge the fee to account holders if they pay after our term date. As we looked at the increased cost of taking credit cards, we decided to start small to hopefully one day add the fee across the board.”

“We raised our prices 3% in order to help offset some of the costs. We know it doesn’t totally cover the expenses but at least it helps.”

“Our customers will not pay a convenience fee. Our competition does not charge a convenience fee. My suggestion would be talk to your credit card processor and negotiate lower rates. They want your business.”

“We are currently not charging but would if our competition or the Big Boxes made the move first.”

“Build in 3% for potential use of a credit card and then offer an additional 3% off pay with cash. We actually offer a 3% Paid-In-Full-With-Cash discount to get all of our money, in cash, up front. This works pretty well.”


“I believe that a credit card fee is warranted and fair. Over time the customer has accepted a fee associated with building material purchases. The feedback we get is why we do not accept cards as a form of payment.

The use of credit card payments and whatever fees are associated are now embedded in our industry. We will ultimately join the industry accepting credit cards and I look forward to having the credit card either from the builder or their customer to secure prepayments before ordering on special order items,

i.e. windows. As an industry, the more we have our customers prepaying for special order transactions, it lessens the chance of customer refusal to pay for products they agreed to on the front end. Charge the associated fee and thank your customer for understanding the additional cost to provide them with exceptional service.”

“We don’t charge a surcharge, but we try to avoid small purchases being paid by credit cards.”

“Do it.”

“I can certainly understand the idea given the high fees card companies charge for service. I would rather phrase the policy as a discount for using cash or check as payment. I don’t think telling someone straight they will be charged more for using a credit card would sit well with the general consumer, especially given the current high inflation rates.”

“I know some lumberyards are toying with the idea of no longer accepting credit cards on credit accounts. I don’t know if many credit account holders will just switch to COD customers or start paying by check again. It is a very addressable problem in our industry. Even car dealerships only accept $5,000 max on a car purchase.”

“We are in the same situation. I have resisted charging a surcharge, but after speaking to other business owners in the area, I am going to implement a surcharge by the end of the month. Most tell me if there is any pushback, the customer will typically use a check to avoid fees.”

“We charge processing fees associated with credit card purchases on large orders. We are reviewing a plan to price it into the products and offer cash discounts to customers.”

“Some customers started complaining, so we took it off. It does hurt all those fees specially when they use company cards.”

“We look at card fees as any other expense. We adjust our percentages to hold our margin line at or near the desired level.”

“Customers will naturally push back, and some may even take their business to a yard that isn’t passing on the credit card fees. It’s a difficult challenge at this point because it has not been done in our industry before. The benefit of being the yard that doesn’t pass along the surcharge is you will gain some business if your local competition is charging. I think it depends on your market currently.”

“For the customers that need to use a credit card we are slowly increasing the margins to cover the extra expense.”

“We accept credit card payments up to $5K, and after that we ask them to pay by check, ACH, or their bank’s bill pay service to continue to receive their discounted pricing. This works well.”

“Make paying a bill easy. Pick up the cost of credit card fees in margins.”

“Do it now. Don’t wait! We are just implementing this and although it does take time and training, it will save us substantial dollars that we were just eating; we don’t even accept credit card payments from the majority of our customers. Do the math on your processing fees and I guarantee you will see a number you simply cannot ignore. Surcharges are becoming more and more prevalent with these lean times and customers are accustomed to seeing them. It may even force your larger transaction customers towards ACH, which is a win as well. Our next steps will be a customer payment portal to open this up to all customers, which would not be viable without the surcharge in place.”

“We eliminate any prompt pay discounts for our credit account customers if they are paying their account balance by credit card. There has been very little push back.”

“Gas stations can do it, why can’t we?”

“We are considering adding a convenience fee with the knowledge that we may well have to waive it for some of our larger customers.”

“We are not doing anything to recapture our costs associated with using credit cards.”

“This January we began charging a 2% fee to pay an AR balance with a credit card. We sell both DIY and pro customers, but the largest percentage of our business is to the professional contractor.”

“I am in the same boat as you. I have been contemplating doing the same thing but have been researching thoughts and opinions on the matter.”

“When we know that a customer is going to pay with a credit card, we add the service fee up front, in the price of the merchandise.”

“We charge a convenience fee to our customers on account. We do not add a convenience fee on cash accounts; we let our margins take care of that.”

“It’s the cost of doing business. However, we do back charge out of a salesman’s gross profit 3% to handle credit card fees.”

“We are dealing with the same issues. We have not implemented anything yet, but we do plan to in the near future. We have also moved up the pricing for the so-called Cash Sales customers that use cards. We do not currently let customers use cards to pay on their accounts.”

“We only charge a fee over $500.”

“We have not implemented a fee to cover the cost of processing credit cards but have been considering this for a while. We offer certain customers a prompt payment discount, if that customer pays by credit card, they do not earn the prompt payment discount as they had the month to pay the bill and then did not pay by check so in those cases the prompt payment discount is not earned. We continue to evaluate this large expense but are still on the fence at this time.”

“We offer volume discounts based on annual sales ranging from 2%-3% to contractor charge accounts.”

“When we take a credit card at the time of purchase, we do not add a fee. When we take it to pay an accounts receivable balance, we do charge a fee. In the case of a bid proposal, the fee becomes part of the negotiation of the total price.”

“We are a net 10 company, so a bill is due by the 10th of the following month. If our customers pay by credit card after the 10th, a 3% fee incurs. This encourages our customers to pay on time. If they don’t have an account with us, all sales incur the 3% fee which also encourages builders that plan to do continued business with us to open a charge account. There has been little pushback as we just reiterate that this is a corporate policy, and the fee is automatically generated. If someone has fallen ill or there is a billing discrepancy preventing them from paying promptly then we will waive the fee.”

“Until the big boxes do this, I don’t think it will become an accepted practice.”

“We absorb the fees.”

“We don’t currently add any charges for credit cards, but we have entertained the idea for quite a while. None of our biggest competitors currently do this, including the big box stores, so it makes it harder for us to implement it. Best thing we can do is try and cover those fees in gross margin. One thing we do to combat the fees, is we don’t allow account customers to pay their monthly statement with a credit card. It’s cash or check only.”

“The bulk of our business is builders and general contractors. For our contractor customer, we have a tiered pricing structure based on customer volume and project size. When setting up a new contractor account we discuss terms of payment. If their business model is to pay by credit card, we set them up on an added price tier that takes into account credit card cost and is about 3% higher than our regular contractor pricing structure. The same applies to existing contractors—if they change to paying by credit card, we move them to a higher sell price structure.”

“We try to recoup the credit card fee in the customer’s pricing profile, which I believe works sometimes but not all the time. Many of those who pay with credit cards are large customers on our best profile that doesn’t take into account paying with a card. Each location sees the credit card fee line on the P&L, and it is a pretty large number. I would like to know what percentage of pro dealers out there are charging a fee to use a card. I feel everyone is in the same boat, and I’m worried about charging the fee when the competitor down the street won’t.”

“We are looking at the same—only on those customers who are paying their monthly statement with a credit card. Pushback is definitely an issue. People like their rebates.”

“We have been discussing something like this recently. We were able to contact other credit card services and cut our rate in half.”

“We charge a 2.5% processing fee. Some push back but they understand it. It is the cost that we cannot absorb.”

“We charge for taking credit cards. It amazes me how many customers are willing to pay for the convenience and or points. This makes no sense to me, but it is the way the world works now.”

“We will accept credit cards for payment on account, however if there are prompt pay discounts or rebates associated with that account, those are forfeited.”

“We have been charging a convenience fee for years. Even our utility companies charge credit card fees. The customers know it is going in and don’t complain. They either pay cash or check if they don’t want to pay the fees.”

“We only charge account customers who have already had 30 days to pay an invoice. Contractors and builders who don’t have an account or walk in customers do not pay an additional fee. I feel it is easier and less confrontational to work it in on the pricing of the material.”


“I bought some building material recently and as I was checking out, they charged me an extra 2% for paying with a credit card. I immediately stopped the transaction and walked out of the store. I went right down the road and bought the same items without a convenience fee being charged. It might have been included in the price, but I don’t like surprises. When will these nickel and dime price increases stop? Next it will be a small convenience fee for having a real cashier, or a convenience fee if you need a shopping cart!”

“Yes, you should charge a fee. Anyone taking rewards credit cards should charge an extra fee. Maybe consumers will realize the local small businesses are the ones funding their credit card rewards. If consumers want to fund a vacation for the year using a credit card, you should help them by charging fees! They cannot expect small businesses to fund their vacations.”

“We charge our customers what we get charged, and in return have very few credit card payments.”

“We charge a flat fee for all credit card payments. It’s a very small portion of our business, so we really weren’t concerned about losing sales. It’s a difficult choice for some, but in today’s world you must protect yourself first. I don’t believe that everyone using credit cards is acquiring points or cash back as they would have you believe. Credit cards have become a way of survival for most people, and especially those who can’t seem to live within their means!”

“The fee is minimal compared to other rising costs. I would bake the fee in the overall price. You do not want to show another itemized charge to the customer in the process. It is more psychological to the customer. This is the same when showing ‘free shipping’ and a higher cost item. I would not show a ‘convenience fee’ as an itemized item to the customer.”

“Several of the local automotive repair shops in the area paved the way for us. They don’t take checks, so it’s cash or debit card with no fee, or a service charge of up to 5% to use your credit card. They’re up front about when you bring your car in for service.”

“Everyone is charging extra. I wanted to take a dozen donuts to a customer from my local donut shop. He told me the total. When I pulled out a $20 bill, he adjusted the price down.”

“We charge a processing fee with no pushback from customers.”


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