If you’ve been shopping lately, you probably noticed something a little different. You might have noticed surcharge signs at the checkout counter saying something like, “A 3% surcharge will be added to your bill if you pay via credit card.”
At restaurants, the surcharges become more noticeable. You might see an automatic credit card surcharge at the bottom of your bill. Sometimes, it’s a surcharge for using a card. Other times, it’s an automatic tip, a service charge, a gratuity … Well, the list of “creative charges” restaurants use continues to swell.
Every day, more articles show up discussing the pushback people are getting on credit card surcharges. The writing on the wall is clear: people are tired of fees and surprise charges on their bills! It’s affecting the salon industry, too.
Should you add a credit card surcharge?
Historically speaking, profit margins for salon businesses have always been low. Many business owners choose to cut costs without cutting quality. Targeting the merchant processing fees credit cards charge is one of the easiest ways to do it.
Today, it’s legal for businesses to pass certain costs of business onto customers. Choosing merchant services that allow you to pass the credit card processing fees onto customers is a practice that’s growing in popularity – a practice known as “dual pricing.”
Dual pricing is not the same as a surcharge; it’s letting people know the price they’ll pay ahead of time. A surcharge is an amount tacked onto the bill – fees often mentioned either verbally or in sneakily small print that’s hard to find.
People hate surcharges because they feel dishonest.
The writing on the wall is clear: people are tired of fees and surprise charges on their bills! It’s affecting the salon industry, too.
Dual pricing is taking over.
Ideally, you won’t have to pass on fees to customers to make ends meet. But, if you do, it’s clear that honesty (and not surcharges) is the best policy. That’s why more salons than ever before are choosing to display dual pricing menus at their venues.
“Dual pricing is absolutely here to stay,” says Alex Groyzburg, CEO of Slice Merchant Services, “But we always coach business owners to think about it from a business perspective. Most clients don’t mind it as much as they say, especially when you say it’s a ‘cash discount’ program instead.”
The key, according to Slice Merchant Services, is to avoid springing fees upfront. Giving them an alternative way to pay that acts as a money-saving measure can help you get the most out of your cash flow without upsetting customers.
It’s up to you.
In a fee-heavy world, there are few things as magnetic to consumers as being able to charge a card without a surprise fee. People can and do notice the small things salons do – and that includes eating the fees that come with accepting credit card payments.
With that being said, you can save a lot of money by allowing your salon guests to pay for the right to use a credit card for your services. In an economy that’s already strained, that extra money can go to a multitude of things that help you stay relevant, competitive and in the clear.
If you’re not sure what path to take, it may make sense to discuss it with others who have a part in your company. Now is the time to talk to your staff and ask them what they think. Talking to your accountant and working with a highly-esteemed merchant service provider can also help.
Of course, if things don’t work out with your current credit card policy, there’s good news: you can always switch back to what you were doing before. You live, you experiment, you learn. It’s that simple.
