Global Merchant Processing Inc. Newsletter - November 2024
Hello from Global Merchant Processing Inc.! Rising operational expenses, including rent and ingredients, are pressuring the restaurant industry. To tackle these costs, many restaurants are adopting guest-facing fees. Implementing fees to offset expenses requires a strategic approach and a thorough understanding of card brand rules, laws, and guest experience. Here’s a look at some options:
Surcharges and Other Cost Offset Methods
Learn about options of surcharging & other ways to offset costs for adding fees and offsetting costs for your restaurant.
Operating costs in the restaurant industry, from ingredients to rent, are on the rise, putting pressure on businesses. To address this, many operators are implementing customer-facing fees. It’s important to understand these different fee options, as each may suit some restaurants better than others. Additionally, compliance with card network rules and laws is crucial to avoid penalties. Businesses should carefully consider how each option impacts customer behavior and make informed choices.
Cost Offset Options
Credit Card Surcharge: A percentage fee applied only when a customer pays by credit card. It must follow specific rules set by card networks and applicable laws.
Service Charges: An additional percentage or fixed fee added to a check, applicable to all payment methods equally.
Cash Discount: Displays a single price, with a discount offered to cash-paying customers. Listed prices must reflect the higher card payment price, not just the discounted cash price.
Option Comparison
Option | Purpose | Applicable Payment Method | State Restrictions | Amount Limit | Disclosure Requirement |
Credit Card Surcharge | Offset credit card processing costs | Credit cards only | Not allowed in some states | Max 3% | Must be disclosed upfront |
Service Charges | Offset specific or general business costs | All payment methods | Depends on local laws | No fixed cap | Must be disclosed upfront |
Cash Discount | Offset costs through cash discount | Cash only | Generally allowed | Not applicable | Must be disclosed upfront |
Each option impacts guest behavior and comes with unique requirements and potential compliance risks. Carefully consider the choice that aligns best with your restaurant's needs and consult with professionals for guidance.
This information is for informational purposes only. Please consult with your legal or tax advisors to ensure compliance with all applicable laws and regulations.
Contact Us
Have questions or need assistance with your retail business? Contact our knowledgeable team:
Phone: (713) 952-3600
Email: sales@globalmerchant.us
Address: 2825 Wilcrest Drive, Suite 489, Houston, TX 77042
Best regards,
The Global Merchant Processing Inc. Team
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