Hotel SA August 2023

M E M B E R A D V I C E
The Benefits
of Passing on
Credit Card
Surcharges
In today’s increasingly cashless
society, credit cards have become
the preferred payment method for
most patrons and guests.
However, accepting credit card
payments can come at a hefty cost
for hotels.
Credit card surcharges allow
businesses to pass on the cost of
credit card processing to patrons.
“Hotels should consider passing on
merchant fees to customers, to help
tackle the rising costs in running a
hotel business through recovering
merchant fees from customers,”
advises Perks Director Tom Paine.
“Some merchant providers make it a
very simple process to automate the
recovery via their terminals.”
UNDERSTANDING CREDIT CARD
SURCHARGES
When a customer makes a
purchase using a credit card,
the business typically pays a
processing fee to the credit card
company. This fee is a percentage
of the transaction amount and
can vary depending on the type
of card used and the agreement
between the business and the credit
card company.
By passing on some or all of this
surcharge, hotels can reduce the
impact of processing fees on
their bottom line. Ultimately, the
main goal of passing on credit
card surcharges is to increase
profitability.
This can have a significant positive
impact on a venue’s profitability,
especially for those that deal
with high volumes of credit
card transactions.
While credit card surcharges may
initially seem like an additional
burden for customers, it is now a
commonly accepted practice.
Transparency is critical if you take
this step. Clearly communicate
the surcharge to customers before
they make a payment. This can be
done through signage at the point
of sale, on your website, menus and
accounts.
Increasing profitability through
credit card surcharges can have a
ripple effect throughout the your
hotel. It can provide the resources
needed to add staff, upgrade your
venue or increase promotions.
HOW MUCH?
• You know your market and this
will dictate how much you can
pass on.
• If your patrons are well-heeled,
they will barely notice it. If you
operate in a lower economic
area, a lower charge may be
appropriate.
• What are your competitors doing?
• Consider a staged introduction.
Start low to test the market and
then increase from there.
• The fear that surcharges will
drive customers away is often
unfounded. However, your
frontline staff should be trained in
what to say if they are questioned
by patrons or guests.
24 | Hotel SA | www.ahasa.asn.au Back to Contents