CC Transaction Fees (Surcharges)

[DPLLC2025]

I own an auto body repair and mechanic shop.  It is illegal for me to charge customers who pay with debit card the Square transaction fees, but it is NOT illegal for Square to charge my business these fees regardless of card type used by my customer.  # 1 I think this is BS!  This massively impacts my small business' financials.  Some users have stated that they incorporate the fees into a customer's bill.  However, this does not work for us as we have industry standard labor and parts rates inside our estimating software that we can charge our customer's so "padding" our customer's bills to cover the fees is not doable. 

We end up losing a LOT of revenue every year due to these fees.  Is there any way to fix this? 

Our estimating software does have credit card processing capabilities and that CC fee gets charged directly to our customers, but it is 4% across the board, which is highway robbery in my opinion, so I have elected not to use that service.  Although Square's rates are less, they hit my business bottom line. 

Not all customer's have the luxury of coming up with multiple thousands of dollars in cash for car repairs, so many of them use cards. 

THERE HAS TO BE A BETTER WAY!!!      

[TheRealChipA · Accepted solution]

@DPLLC2025 while I sympathize, as a fellow seller, the fact is that this is not a Square issue.  Square is charged these fees by the card networks.  The same goes for all of Square's peers -- Toast, Clover, etc.  They all pass on debit card fees.  Sure, many of the shady POS vendors who don't care allow surcharges across the board, and usually they are shut down and/or jailed before too long.  The fact is the current laws in our country allow the card networks to do this and to restrict which cards we can surcharge. 

So, your only option (your better way, if you will) is to contact your congress people, to contact your state government, and possible to join a class-action lawsuit if one exists.  I'm not aware of one currently, however.  But that is a very LONG term solution, if it even works out at all.

Here's what I do.  I build in fees to my cost calculations, then I add a pad to every item in my catalog -- currently around 4% because I'm an ice cream shop with average transaction less than $25.  For 13 years now everyone has paid that price that has the card fees baked in -- even cash customers.  That's where the magic happens.  In over 13 years, I have never paid more in fees than I collected using this method, and you can bet I watch that very closely.  For me, it is a PR victory.  I don't have to surcharge.  I don't offer cash discounts.  Everyone pays the same price and I can tell you that no one has ever complained.  My customers love the fact that I don't fee them to death, that my price is my price.  The love the fact that when they ask if I prefer cash, I can honestly tell them that "I don't care HOW you spend your hard earned money with me, I just care that you DO spend it with me."

In the end card fees are no different that rent, utilities, etc.  They are all a piece of that calculation of item cost that I used to price items accordingly.  If you treat it that way, you'll sleep better at night.

[VanKalkerFarms]

Not really much more I can say cause Chip nailed it. The fees are the fees. Square doesn’t make the rules, those are imposed by the credit card networks. Remember more than 90% of the feee square collects are passed on to the networks upstream of them. 

yes it adds up, but it is how people are going to pay and you need to accept that and figure out how you want to tackle it. Just like Chip, I account for money handling in my pricing algorithm that also has all the things like insurance and property taxes and labor, etc etc