Stop Paying Credit Card Fees!
In today's world, credit cards have become an everyday necessity. Whether it is for shopping, paying bills, or registering for programs, credit cards have made our lives easier. However, with the convenience comes the cost of credit card fees. Did you know that businesses pay an average of 3-5% in credit card fees for every transaction made through credit cards? This may seem like a small percentage, but it can add up to a significant amount over time. In this blog, we will show you how businesses can save valuable money by implementing a fee payment structure for their customers and that it's something bigger companies have been doing for quite some time.
Credit card fees can deter small businesses from using credit cards as a payment method since they charge you for each transaction made through credit cards. These fees can vary depending on the type of credit card and the volume of transactions. The fees can range from 1.5% to 3.5% or more per transaction, which can be a big hit for businesses. The fees are usually deducted from the total transaction amount, leaving the company with less money at the end of the payment.
While you as a business cannot simply opt out of avoiding credit card fees, you can take steps to reduce them. One way is to implement a fee payment structure where customers pay the fees instead of you. This can help save valuable money that can be used for other reasons, such as improving your services or adding additional products!
Ticketmaster, a famous ticket sales company, has implemented a fee payment structure for years. Customers who purchase tickets are paying for more than just their event tickets. Customers are paying for various fees as well. Beyond the face value of the event ticket, Ticketmaster has its customers pay for the credit card fees associated with the payment. Besides the credit card fees, Ticketmaster has also added service fees, processing fees, delivery fees, and facility charges. They have received negative feedback regarding the additional fees, but that hasn't stopped them from being one of the world's largest, most-known ticket sales companies.
Following Ticketmaster's example, small businesses can implement a similar payment structure and save valuable money in the long run. Ticketmaster has shown that customers are willing to pay fees for the convenience of using credit cards, and businesses, even small ones, should start to take advantage of this to reduce their expenses and increase their revenues.
Introducing a fee payment structure has several benefits. Here are some:
- Cost Reduction: This is the obvious one. By having customers pay the fees, you can reduce your credit card fee expenses and, over time, save a significant amount more.
- Increased Profits: With the money you will be saving from no longer paying credit card fees, you will be able to increase your profits, which can then be put back into your business to offer solid programs or additional programs you've wanted to add but didn't have the resources for.
- Transparency: A fee payment structure allows you to be transparent with your customers about what they are paying for.
- Convenience: Credit cards are just convenient for customers, simple as that. By having a fee payment structure, you will still be offering that convenience, but you'll be able to save more along the way.
And unfortunately, with pros, there are some cons:
- Opens the door for potential backlash: Any time a customer may have to pay more, their first reaction is negative. But as we shared, even with the negative feedback that Ticketmaster received, people are still coming back for more. And this is only a negative if you introduce this structure after not having it. But if you are new to taking credit card payments and start with a fee payment structure, this shouldn't be a worry!
- Price Increases: With your costs reduced, your customer price will increase, affecting your competitive advantage.
Implementing a fee payment structure requires careful planning and execution. Here are some steps that you should start with if you are looking into covering credit card fees:
- Communicate: You must create an effective communication plan for your customers so they clearly understand the fee payment structure.
- Train Staff: If you have other employees who interact with customers, they should be trained to handle customer questions about the fee payment structure and explain it clearly to customers.
- Monitor: Just like anything else in your business financials, you should monitor the fee payment structure regularly to ensure that it is working correctly and positively impacting your bottom line.
Implementing a fee payment structure can be a game-changer for your business! It can help to reduce your credit card fees and increase your profits. By following the steps of Ticketmaster, you can implement a fee payment structure successfully and start saving valuable money.