Should Companies Pass Credit Card Fees on to Customers? A Growing Trend Explained (12/8/25)
In recent years, more businesses—large and small—have started adding extra fees when customers choose to pay with a credit card. These “credit card surcharges” or “convenience fees” typically range from 2% to 4%, reflecting the processing costs companies incur each time a customer swipes, taps, or enters a credit card number. While the practice was once uncommon, rising operating costs and slimmer margins have made it increasingly popular across many industries.
Credit card processing fees have always been a part of doing business. Each transaction triggers charges from card networks like Visa and Mastercard, often totaling several percentage points of the sale. Traditionally, businesses absorbed these costs as part of their overhead.
However, inflation, higher labor costs, and competitive pressure have pushed many companies to rethink this model. Instead of raising prices for all customers, some businesses opt to pass credit card fees only to those who choose that payment method. For many merchants—especially small businesses—this feels like a fair compromise.
Customer reactions are mixed. Some view the fees as an unnecessary burden or a sign of poor customer service. Others understand the rationale, especially when businesses are transparent about the charge.
A key point of frustration often comes from lack of disclosure. When customers are surprised by a fee at checkout, the negative experience can outweigh the few extra dollars the business is trying to recoup. Clear signage, upfront communication, and offering alternative payment options can make the practice more acceptable.
Credit card surcharges are legal in many regions, but rules vary by location. In some areas, laws require businesses to:
Clearly disclose the fee before payment
Cap surcharges to match actual processing costs
Offer a cash or debit alternative without added fees
Companies that fail to follow these guidelines may face fines or damage their reputation.
Some businesses prefer other strategies to manage processing costs, such as:
Offering cash discounts: Instead of adding fees, businesses reduce prices for cash customers.
Bundling fees into product pricing: This spreads processing costs evenly across all sales.
Encouraging low-fee payment methods: Such as debit cards, ACH transfers, or mobile payments.
Each approach balances transparency, customer satisfaction, and business sustainability differently.
The debate over credit card surcharges reflects a broader challenge: how companies manage rising costs while maintaining customer trust. When done transparently and fairly, passing along credit card fees can be a reasonable business practice. But companies must consider customer perception, communicate clearly, and comply with local regulations to avoid backlash.
As consumers become more aware of the costs associated with digital payments—and as businesses continue navigating economic pressures—credit card fees are likely to remain a significant topic in the future of retail and service industries.
The information provided in this article is for general informational purposes only and is not guaranteed to be 100% accurate, complete, or up to date. It should not be considered legal, financial, or professional advice. Laws and regulations may vary by state or locality. For guidance specific to your situation, please consult your local government, a licensed attorney, or a qualified professional.