Now we have implemented SagePay Version 3, our Shopfront clients have the facilities to surcharge their customers when using debit and/or credit cards – but should they? I suspect like you, I find it annoying when there is a surcharge or ‘booking’ fee when using a credit card for flights or tickets and only pay it because they all charge the extra. If I knew I was going to be surcharged for buying a T-shirt I would look for another site and if I was surcharged without knowing, I would never come back!
However, in B2B transactions with tight margins, things are a little different and we have had requests for surcharging in the past. Our clients know their customers and market best so we are providing them the tools to implement surcharging in a fine grained way; differentiating between B2C (walk in customers) and B2B (account customers), applying surcharging only to balance payments and not orders, and finally, applying surcharging only to specific customers.
In most case we think B2C customers, who always pay by card, should not be surcharged and the fees built into the price to maintain the margin. B2B customers who normally pay on account could pay a surcharge if they pay by card to maintain the margin but it might be preferable to put habitual card payers onto a different pricing or discount structure and maintain the margin that way. We can see why surcharging on balance payments only would be attractive; you have already offered credit and now rather than paying you directly they are getting further credit on their card and you are picking up the bill!
We don’t pretend to know the right answer for your business but we do think your surcharging policy should be thought out with great care if you want to implement one, and other strategies around pricing and discounting should also be considered to maintain your margins.