Should I pass credit card processing fees to my customers?

Credit Cards
Credit card processing fees can be troublesome for restaurant operators. / Photograph: Shutterstock.


As prices for just about everything increase, I’m wondering whether I should pass on credit card processing fees to my customers with a 3% surcharge for paying with credit card. What do you think?

– Owner-Operator


Credit card fees can add up as a significant expense. Couple that with rising food, labor and rent prices, and it is even harder to see margins in the restaurant business.

Many operators add a surcharge to guests’ bills if they pay with a credit card to offset the cost of the credit card fees. However, I’d advise against that practice for a simple reason of psychology: The main goal of your restaurant is to generate revenue (and profit) from your guests’ visits. If you choose to accept credit cards, you are inviting your guests to pay that way. Penalizing them for paying in a way that you accept but do not prefer seems to me to be a very ungracious policy, given that the guest is simply trying to give you their dollars in exchange for your food, beverage and hospitality. My advice is to reward rather than penalize the guest, by folding the expense of accepting credit cards into your menu prices, but offering discounts or other incentives, if allowed, for paying in cash. Instead of sending the message, “Thanks for your money but I’m going to charge you more if you don’t pay me in the format I prefer,” you are saying, “Thanks for your money and I will even thank you further if you can accommodate my preferred format for payment.” That exchange tends to build good will.

If you do make clear that cash is your preferred form of payment, reduce friction for the guest by letting them know about your preference in advance, providing an ATM or recommending low fee ATMs nearby.

Finally, check with your attorney and restaurant association to be sure you are in compliance with any applicable regulations regarding how you disclose any discounts or surcharges as regulations vary. As always, this column is not legal advice.

More on credit card surcharges here.