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Sumo Stomp
We acquired SumoQuote! Learn more here
🏔️ Peak Performance 2024 is here. Get the report

Why Roofers Should Build Credit Card Fees into Their Margins

adjusting the dials of costs, margins, and sales

Without the right payment procedure in place, how will you get paid? Credit card fees are a necessary part of accepting credit card payments. You need to be strategic about credit card transaction fees. Overall, the best practice is to build credit card fees into your margin.

Before we go into detail, let’s cover the basics of credit card fees.

The Basics of Credit Card Fees

What Are Credit Card Processing Fees?

Credit card processing fees are the amount credit card issuers or payment processors charge merchants each time the business accepts a credit card payment. These fees are required to process and authorize transactions.

If you’re looking for more help, check out our blog to learn how to accept credit card payments as a contractor.

On average, credit card fees are typically around 1–3.5%, depending on the credit card issuer. Take a look at the chart below to see what different credit card companies charge on average per transaction.

Card Network Interchange Fees Assessment Fees
American Express

Source: NerdWallet

Who Pays Credit Card Transaction Fees?

Merchants accepting the payments are typically responsible for paying any fees associated with credit card transactions. In some cases, business owners can surcharge customers the cost of the fee.

Business owners can also include credit card fees in their margin as they determine the operating cost of their service.

Is It Legal to Charge a Credit Card Fee?

In most U.S. states, it is legal to surcharge customers for credit card fees. The following states currently have restrictions regarding credit card fee surcharges:

  • California
  • Georgia
  • Indiana
  • Iowa
  • Michigan
  • New York
  • Ohio
  • Oklahoma
  • Pennsylvania
  • Texas

In the U.S., businesses can’t surcharge customers more than the amount of the credit card fees.

3 Benefits of Building Credit Card Fees into Your Margin

Now that you understand credit card fees, let’s look into the benefits of building credit card fees into your margin.

Your Price Is Set

When your pricing accounts for all fees upfront, it leaves less room for disagreements.

With an itemized fee list, customers are more likely to try and negotiate your price down. Instead, all your costs and fees are included in your pricing structure and represent the cost of your service as a whole.

Pricing can be a tricky thing. Consumers often perceive prices differently, even if the final cost stays the same.

For example, you might think paying $2 for a left sock and an extra $2 fee for the right sock is ridiculous. But you probably wouldn’t bat an eye at paying $4 for a pair of socks. It’s all about the perception of what you’re paying for.

It’s the same concept as free delivery. You might scoff if you see a product for $10 with a $5 delivery fee. However, most people wouldn’t mind paying $15 for a product with free delivery.

We think we’ve scored a deal with free delivery, even though the final cost is the same. The sellers likely built the delivery cost into the price of the $15 product, but we don’t like paying “extra” to cover delivery for the $10 product.

Often, people would rather have one all-inclusive price rather than an itemized list of extra fees. Customers are less likely to question the cost of your service without small fees listed.

Better Customer Experience

No one likes surprise fees. People feel nickel and dimed when they see a small percentage fee on their bill to account for the credit card fees. Instead, customers are happier paying for your expert roofing services versus covering various operating cost fees.

Ensure the Fee Is Collected

When you build the credit card fee into your margin, you know the credit card fee will be collected and paid. You don’t need to worry about the fees for each transaction—it’s all accounted for in your margin.

Tracking Financials for Your Roofing Business

Mastering credit card payments isn’t the only way to set your roofing business up for success. To ensure your finances are in a good place, read our other post to learn 5 ways to improve your roofing business’s cash flow.

To help you stay on the right track with all of your business’s financial needs, use a payment processor like JobNimbus Payments. 

Try out JobNimbus Payments in our sandbox to see how a payment processor can level up your financial game today!

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