- On February 25, 2013
Should Merchants Surcharge?
In many states merchants have had a decision to make. Recent developments allow merchants that accept credit cards to pass card processing charges on to their customers. So should merchants surcharge their customers?
First of all, in at least ten states there are laws that prevent merchants from assessing their customers a surcharge. In any case a debate rages among consumer protection groups; how will merchants react to this new legal ability to pass on credit card charges to their customers?
Merchants have now had almost a month to start surcharging but not many have done so. It would seem that under the current economic climate and with a do nothing Congress, that merchants both large and small realize it would be a mistake to upset their customers.
Merchants should do more than quietly not pass on these charges. They should inform their customers that they are not, and will not, pass on such charges. Consumers are much more aware than before. On the first day that merchants could pass on credit card processing charges I asked at the market if my grocer was passing on these fees. The clerk told me no and informed me that at least seventy-five percent of customers on that day had asked the same question.
Merchants are being watched very carefully as our society is very distrustful of those that have, and how they treat those that have less. Should merchants start passing on surcharges it could be expected that customers would react in a way that would not be favorable for the merchant.
Thanks to technology and widely available access to the Internet consumers now have more of a voice in business. With social media website growth where people share thoughts and ideas, the word will spread quickly about any merchant passing on such charges. Worse yet will be the response to any merchant that tries, albeit little by little, raising prices quietly to cover these charges. That is the reason merchants should declare their policy on this matter and assure customers why they are not passing on credit card surcharges. Honesty and truthfulness is always the best policy, especially for merchants that depend on customer loyalty to remain in business.
When a social issue goes viral things can get out of hand. One negative aspect of the Internet and online social interaction is that rumors often spread faster than facts. Once social networks get down on a person, subject or organization it takes time, attention and money to set the facts straight. This has happened most recently to restaurant chains. Their response to online social pressure was naive and just made the situation worse. This is another reason that any merchants that accept credit cards should publicly and obviously answer the question; should merchants surcharge?