Should You Transfer Credit Card Fees to the Guests?
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- Опубликовано: 7 июл 2021
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In this video we're talking about a very hot topic in the restaurant world right now and that is transferring credit card processing fees to the guests, as these fees can cost you tens-of-thousands or even hundreds-of-thousands of dollars per year.
Many owners question this strategy, but I'm going to tell you why it is one of the best systems you can put into place, as well as how to do it.
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I did it last year, best decision all year
7:48 There are local taco shops where I live, and they surcharge credit cards for 30 cents. Gas stations do the same. I just pay cash now.
As a customer who uses a credit card that has a 3% cash back bonus for restaurants, I absolutely resent this fee and I avoid places that do this.
As a restaurant owner that grossed almost 3mil pre covid, I personally think that menu prices should reflect all of these fees that the business eats (tips/tax too but that's a whole different argument). Having to notify a customer in some way, either by mouth/fine print on the menu, that there's an additional fee for credit card transactions feels very unprofessional. So much of business now is already done through credit cards without the added fee so people come in with that same expectation - just imagine someone going out of their way to try a restaurant for the first time and being off put by added CC fees; the restaurant puts themselves at risk of getting poor reviews for doing so because people are shocked by the practice since they weren't notified from before coming in.
The push for CC fee charge rather feels like a way to promote cash business so that businesses can underreport their sales.
All very credible points Yuki. It is certainly a matter of preference when it comes to this tactic. Here's what I've come to learn with all the bars and restaurants I've worked with: owners and managers spend way too much time worrying about how their guests will react to pricing and the bill and too little time creating an experience in which they don't question anything at all. I've found this to be the cure for places that believe providing cheap products and discounts is the way to succeed. That isn't to say you can provide discounts and specials. Just don't rely upon them. Nevertheless, I completely understand your point of view and there are some guests out there who might complain on Yelp. That's a fact.
Thanks for your feedback and for stopping by Yuki.
I don’t go to places that charge those fees
Why not just raise your prices by 2% - 3%? I doubt anyone is discerning enough to notice a 2% - 3% increase in the price, but they're sure as hell going to notice a surcharge thrown in their face often after they've decided to buy the product. Bad idea for many reasons. The only ones making out on this "deal" are the processors and their salespeople. I know, because I am one of them, and it's a great deal for me, but I won't do that to my clients and the general public.
Are these fees in addition to using a POS like Upserve?
No TS, if you are using Upserve, you would be using their processing fees. But you should still be able to add a surcharge to the bill. Talk to them about how to do that.
I am a server at a restaurant in Texas. Is it fair that the restaurant I work at deduct the cc fee from our tips?
For me it's a gigantic NO, Belinda. This is not fair. Unfortunately, in most states there are no laws prohibiting employers from doing this, but I do know that it's illegal in California and Maine. It's not cool for a business owner to put their expenses on to their employees, although I am fine with them putting the cc fees on to the guests, simply because eating out is a luxury, not a necessity. Best of luck to you, but you don't have much of a choice in this situation. Cheers.
I thought about this one for a really long time. Originally I had planned to take the fee out of tips for my next project, but I think ultimately I’d rather keep the staff happy if I’m already paying a tipped wage to not take out the fee from their hard earned tips. All I ask is they work with me on promoting certain products or upselling things.
@@BrianMDPhD what are you paying your servers? what state?
my answer is: why should the restaurant have to pay for your tips? At all? They already have to pay matching taxes on your over all pay. They have to pay for software, an accountant, and probably a payroll company just to extract money from your pay to give to the government. The government is your biggest expense. They don't pay your restaurant owner for getting in between you and them and doing all the work and having to pay for it all.
Wrong I don't do business with those that pass the buck on me