How Service Companies Can Benefit From Credit Card Surcharging and Dual Pricing
As an increasing number of consumers turn to credit cards as their primary payment method, your service company, whether it’s landscaping, auto repair, dealership, or HVAC, needs to adapt to meet that demand while facing the new challenge of controlling payment processing fees. Two solutions that have become increasingly popular are credit card surcharging and dual pricing. By passing on the cost of credit card processing fees to customers with these options, or incentivizing them to utilize other payment methods, you can maintain profit margins rather than paying these fees yourself. The goal is to determine which of these two options fits your business style best.
Overview of Credit Card Surcharging and Dual Pricing
To make the choice between credit card surcharging and dual pricing, consider how they differ. Credit card surcharging involves passing on fees to your customers, usually equal to processing fees, to the sale when a customer pays with a credit card. In contrast, dual pricing shows customers the price they’ll pay depending on the payment method they choose. For example, you could offer a discount to customers who pay with cash or check, or accept ACH payments as well as credit cards. Customers will be more informed about their options, and businesses reduce processing fees overall.
Added Benefits to Consider
The primary benefit of dual pricing and surcharging is offsetting payment processing fees, but there are additional benefits to a strategy of credit card acceptance with surcharging and dual pricing.
Increased Revenue and Profits
Businesses that accept credit cards can increase their revenues. People are willing to spend more when using credit cards in a transaction. This means that you may be able to upsell additional products and services. For example, a landscaper could upsell new mulch or an auto repair shop could sell a new filter to accompany an oil change. When you combine this with surcharging and dual pricing, you’ll see increased revenue and profitability.You have a lot to gain when it comes to dual pricing and surcharging. Your company can incur substantial costs from credit card processing fees for large installations and repairs, so dual pricing and surcharging can offset these fees. Additionally, if you are like most businesses in the service industries you have faced significant challenges in the past few years The stress of inflation, the shortage of skilled labor, and supply chain disruptions have made running a viable business difficult. By offering credit card surcharging and dual pricing, you can have one less thing to worry about and maintain a healthy bottom line.
A Competitive Advantage
By offering lower prices for cash or check payments with dual pricing, you may also be able to attract customers who are looking for the best deal. This can help landscaping, auto repair, dealerships, HVAC, and other service companies to stand out from their competitors and increase their customer base. Auto repair customers are especially price-conscious, so implementing dual pricing and surcharging can allow businesses to offer lower prices than their competitors if their customers choose to pay with cash or check. Additionally, incentivizing cash payments can improve cash flow. Cash payments can be processed more quickly than credit card payments, ensuring you have the funds you need to pay for supplies and other expenses without delay. Also, remember that consumers seek convenience. So, if they know they have the option to use a payment card rather than wait for an invoice, they may be more loyal to a company. Credit card surcharging and dual pricing gives you the freedom to offer the experiences your customers prefer.
Reduced Fees During Peak Seasons
Spring is undoubtedly the busiest time of year for seasonal service companies. A landscape business owner said he makes half his money for the year from March to June. Similarly, those in the HVAC industry have peak business seasons in the summer and winter due to the high demand for heating and cooling. With such a high influx of business during this time of the year also comes a high influx of credit card payments, and with it, credit card processing fees. By implementing credit card surcharging and dual pricing, landscaping, HVAC, and other service businesses can retain their profit margins and avoid the high processing costs associated with credit cards.
Dodson Payment Solutions Is Here to Help You Get Started with Credit Card Surcharging and Dual Pricing
Dodson Payment Solutions is aware of how quickly the extra charges from credit card processing fees can add up. No matter what industry your business is in, we can help you. With us, you can save your business thousands of dollars each year by offsetting credit card fees with surcharging and dual pricing. Our POS systems streamline the process by automatically applying the surcharge during the checkout process for fast, accurate checkout. Ready to get started? Contact us today and discover how credit card surcharging and dual pricing can benefit your business.