Scores of flooring retailers are potentially leaving tens of thousands of dollars on the table each year for not doing one simple thing—adding a surcharge to cover the cost of processing fees charged by credit card companies.
It’s an issue that has many dealers talking about how best to handle the extra 2%-3% charged to the merchant after every credit card transaction.
According to NerdWallet, it is legal in most states for businesses to charge an additional fee to use a credit card, except in Connecticut, Maine, Massachusetts and Oklahoma. Colorado caps the surcharge at 2%.
The majority of flooring dealers polled by FCNews say they do not surcharge; many simply build the cost into the product/project or simply absorb it. Here’s what some of them had to say:
Add a surcharge
“We just implemented a surcharge [five months ago]. It’s been a game-changer. We’ve received no push back from customers, which was our major concern for rolling it out. We’re now receiving more check payments and customers taking advantage of financing. We have a note at the bottom of every quote stating that a 3% surcharge will be incurred with a credit card payment. If a customer pays with a credit card, we add it as a line item.”
— Matt Wien, Marshall Flooring, Mayfield Heights, Ohio
“We changed how we charge for these credit card fees a couple of years ago when we realized the true expense to our business. We are in a state that allows credit card surcharging, so we decided to implement a 3% fee on credit cards. Our system automatically does not charge debit cards, so it makes it easy to do this—and stay compliant. There was a little pushback from our team at first but wasn’t an issue after they got accustomed to telling clients there would be a 3% fee for credit cards, but no fees for debit cards or checks.”
— Mark VanderGiessen, Haight Carpet & Interiors, Woodinville, Wash.
Absorb the cost
“We currently absorb the cost of the credit card fees. In Connecticut, we are not allowed to add a surcharge for swipe fees. We have contemplated increasing our prices by 3% across the board and offering a cash discount. But we have not pulled the trigger on that option yet.”
— Paul Deschenes, Schneider’s Flooring America, Vernon, Conn.
“We do not institute any kind of surcharge. We have noticed a substantial increase in the number of customers using credit cards. At the same time, we have also noticed that we’ve been receiving payments much quicker by allowing customers to pay by credit cards. In my opinion it is well worth the 3% fee or whatever it is going to cost us to receive that payment now. We have considered a surcharge but decided that most customers would not like that. Therefore, we focus on top-notch customer service and making sure that customer is going to call us again and again. To me, that is worth more than a tiny fee.”
— Eric Buehler, CarpetsPlus ColorTile, Thayne, Wyo.
“We just use the customers’ ability to use their credit card almost as a closing tool. Sometimes we will discount for the right cash customer, but everyone wants points for using their card. In retail, if we don’t allow them to use a credit card, our competition will.”
— Ben Case, Carpet Collection, Lockport, N.Y.
Build the cost into the job
“We build it into the price of the flooring, per square foot. We have found customers don’t want to keep adding this and that to the number; they just want to know what the square foot price is. Many of our customers pay via a credit/debit card. If they pay by cash or check, then we can offer them a discount for not using a credit/debit card.”
— Typhannie Harker, Carpeting by Mike, Somerset, Wis.
“We don’t charge the client the actual cost. Rather, the client pays the fees discriminately through an overhead rate that is applied to the material and labor costs prior to calculating the selling price. That way the fees are covered and does not become a point of contention with the client.”
— Bobby Merideth, Flooring America, OKC, Oklahoma City
“At this point we are making sure the swipe fees are covered in our margins. As we see more industries and competitors charging swipe fees, we may change what we are doing. My preference would be to have the fees covered by our margins, treating the fees just like any other expense.”
— Jon Dauenhauer, Carpet World, Bismarck, N.D.
“We pass it on to the consumer, and we always add a markup to it as well. In this particular economy we can no longer absorb anything because every lead, transaction and every metric counts more than it ever has—like that of the 2008 economy.”
— Don Lovato, CarpetSource USA, Albuquerque, N.M.
“We never used to factor in credit card fees, but they have become used so much that we are now. We put in the credit card fee into the cost of the job, but also offer a discount if the customer pays by check. Must customers take the pay-by-check discount.”
— Bob Gaither, Quality Carpet & Flooring, Akron, Ohio
“We do not charge swipe fees but figure extra margin into our jobs to cover the fees. We are always looking at the pros and cons of adding the fees on the invoice. It seems that customers are more understanding and do have the option of writing a check or paying with cash to avoid the fees.”
— Don Cantor, Lake Interiors, Chelan, Wash.
“We have never charged an additional fee for swipe charges as this is another cost for doing business (website, phones, etc.) in our opinion. All of the fees we incur are figured into the overhead cost of doing business, and the customer is able to pay with their preferred method of payment while we don’t charge them extra to do so.”
— Carlton Billingsley, Floors and More, Benton, Ark.
“I would never charge processing fees to customers. That is a cost that’s built into my gross profit. Customers do not like to be nickel and dimed.”
— Bob Duke, Floor Magic, Maine
“We currently build a small percentage into our overhead and price to cover the finance. charges from both swiping a credit card and running special finance plans. These two methods are the top ways our customers pay for their projects. We are always looking at this cost and finding ways to minimize its impact to our bottom line. We are not currently charging customers for a swipe fee, but eight out 10 customers ask if there is a fee. I know this is becoming more acceptable and I am currently researching the best way to communicate this to our customers. My plan is to start charging a small percentage as we head into 2025.”
— Bob Pireu, Bob & Pete’s Floors, Canton, Ohio
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