Surcharging and credit card fees are a reality for many service-based businesses, and how you handle them can impact both your profits and client experience. Understanding the pros and cons of passing these fees onto clients can help you make a decision that supports your business and make the best decision for your clients.

Surcharging and Credit Card Fees. Let’s Talk About it. What is surcharging?

Surcharging is an optional feature that lets you pass along a small, percentage-based fee to clients who choose to pay with a credit card (in eligible regions). Think of it as a simple way to offset those extra processing costs without paying the credit card fees youself.

By using surcharging, you can keep offering the convenience of credit card payments, without absorbing all the fees yourself. It’s a seamless, compliant solution that Dubsado offers to keep everything transparent for your clients, while giving you the freedom to cover some of the costs of your business. This is the biggest reason I recommend using Stripe within your Dubsado account, also known as Dubsado payments.

States and U.S. territories that DO NOT ALLOW surcharging:

– Connecticut
– Maine
– New York
– Massachusetts
– Puerto Rico

*California does allow surcharging, but has very strict rules around this.

Should I add surcharging to my client’s invoices? (If legal in my region)

When it comes to credit card fees, there are really two paths: you can pass that cost on to your clients, or you can absorb it into your business. Neither option is “right” or “wrong.” It really comes down to your priorities and the kind of client experience you want to create. Here’s a quick breakdown of both sides to help you decide what makes the most sense for your business:

Yes to Surcharging

• Protects your profit margins by covering credit card processing costs
• Keeps your rates aligned with the true cost of doing business
• Gives clients the choice: pay with a card (and fee) or use ACH to avoid it.

No to Surcharging

• Fee can feel like an “extra” or unexpected charge to clients
• May impact the overall client experience if it feels like nickel-and-diming
• Absorbing the fee into your pricing can keep the process seamless and simple
• Eliminates surprises and creates a friction-free payment experience
• Client’s enjoy using their credit card! Let them!

Finding Your Fit

• Surcharge if you want to:
  • Protect tight margins
  • Encourage alternative payment methods
  • The credit card fee would be relatively small if you offer smaller packages
• Skip the surcharge if you want to:
  • Prioritize a smooth, surprise-free client experience
  • Build fees into your pricing instead

My personal take on surcharging and credit card fees as a service-based business owner

I personally do not surcharge my clients. For me, credit card fees are just a cost of doing business. These are an expense I take on and factor into my pricing from the start. I want the experience of working with me to feel seamless and stress-free, so my clients never see an extra “fee” tacked onto their invoice.

To me, it’s worth it to absorb the cost in exchange for a smoother, more transparent client experience and to keep the focus on the value I provide.

This fee is also tax deductible at the end of the year. The benefit and ease of allowing my clients to use a credit card is a win to me!

Want to talk more about your client experience in Dubsado?

I’m a Certified Dubsado Specialist and help business owners set up their Dubsado to work FOR them by creating systems in their business and a smoother experience for their clients. With a complete, custom Dubsado setup, we’ll transform how your business runs and how it feels to run it. INQUIRE TO START THE CONVERSATION.