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To add or not to add a COVID-19 Fee?

As businesses around the US begin to open their doors, customers are seeing a new fee added to their bill. Something called a COVID-19 fee. News has been reported everywhere from Chicago, to New York, to Miami to Michigan about the fee. In its most simplistic form, the COVID-19 Fee is a surcharge. Surcharging is perfectly legal when business owners provide the proper notification. As businesses now find themselves with new challenges such as product and supply price increases, delays within the supply chain, and other factors negatively impacting their bottom line, the COVID-19 surcharge seems to be the response.

Covid-19 Fee receipt

Photo Source: Today.com

Credit card surcharges: is your business doing it right?

Surcharging is legal*

Since surcharging is legal, the question is, should your business add a COVID-19 fee? In general, consumers view added fees distasteful and continued patronage may suffer. The factor with the COVID-19 fee that differs from any other surcharge is that globally, everyone was affected, and imposing a fee that ties the global pandemic to your business’ surcharge may lead to distraught customers. There are, of course, customers that are loyal, remain loyal, or are even new customers that will support your business as you reopen realizing they can help by tipping extra or purchasing more products than normal to help you rebound. Not all individuals are in a position to do so, however, and have had their own form of suffering through this global pandemic.

Other options to help your business rebound

You may be interested to know, if you are currently exploring adding a COVID-19 fee, there may be a better way for your business to achieve the same results without creating dissatisfied customers. An option is available for your business to continue to accept credit card payments while removing all credit card processing costs.

This is what’s known as a cash discount program.

Advanced software is currently available that automatically offers your consumers the option to receive a discount if they make a purchase with cash. Like a surcharge, a business is required to notify all customers of a service or convenience fee added to all transactions prior to purchase. The difference between a surcharge and cash discount is that with a cash discount, the fee can be removed with the consumer paying with cash.

The consumer sees your prices upfront and the convenience or service fee is openly disclosed for transparency. Offering a discount for a cash payment gives your customer the option to save money and your business keeps card processing expenses at an all-time low.

Not everyone’s cup of tea

The truth in the matter of the COVID-19 fee is that not everyone will agree with this surcharge. It’s important to note that every business is different, and a surcharge or cash discount may not be a sensible option. No matter how you look at it, the world is going through unprecedented times and we all need to be informed to make the best decisions.

If you’re interested in learning more about payment solutions, we’re here to help you determine what’s best for your business.


Referenced articles: https://www.today.com/food/what-covid-19-surcharge-why-some-restaurants-are-adding-extra-t181450

https://abc7chicago.com/covid-charge-covid-19-surcharge-legal-receipt/6220104/

https://nypost.com/2020/05/14/restaurant-slammed-for-covid-19-surcharge-on-meal/

Miami Restaurant Charges Customers ‘COVID-19 Fee’ To Cover Pandemic-Related Costs

https://detroit.eater.com/2020/5/13/21257541/michigan-restaurant-covid-19-fee-takeout-orders-increase-meat-food-packaging-cost

*Source: Learn more about the Durbin Amendment – www.napcp.org/page/DurbinAmendment

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