My daughter’s pediatrician adds a surcharge to credit card payments. So does the insurance company – the one that accepted my auto premiums for years without one. Even a mom-and-pop upholstery service I used recently added a credit card surcharge.

People have become accustomed to surcharges. And, once they start feeling better about restaurants too, you have an opportunity to do the same (if you have not already taken it).

Recently the Texas Restaurant Association (TRA) asked me to participate in a webinar entitled “Protecting Your Margins: Surcharges, Discounts & Swipe Fees Explained.” TRA members can watch it here.

Not a TRA member? There are so many reasons to become one, and you can start the process here.
 

 

The History

Four years ago, I became known as a big advocate of credit card surcharges, and I started hearing from people all over the country who wanted to talk about that.

Back then – post-COVID, people realized just how much they loved restaurants (and restaurateurs). The result was what now looks like a glorious post-COVID spending boom.

For my clients who took advantage of that goodwill, the credit card discount line on their P&L, which used to be 3% or more, reduced to 0.6% or 0.7%. Every period, when I see that on my screen, I smile. It’s a truly beautiful thing.

You know what a difference 2 percentage points makes. I’ll bet you have already done a calculation in your mind about how a percentage like that would increase your profits.

 

Pay Attention and Plan Now

Now, things have changed. We’re dealing with a value gap and a 100% focus on guest count.

Still, following the $10 surcharge in bag fees Southwest Airlines imposed as a response to the rising price of oil, it now costs more for your bag to fly than it used to cost for you to fly.

The best thing to do now? Educate yourself about a credit card surcharge – even if you see today may not be the right day to implement one.

Understand how this all works and how you will implement it when the time comes.

If you have not done so already, figure out how to bond to your guests so they pick you above your competition, post about the greatness of your restaurant, and tell their friends.

If you want to be a top performing group today, with industry-leading comp sales, you really have no choice.

Then, once you do, take advantage of the credit card surcharge trend. And smile at every new P&L.