Dear Deb: Should I Add 3% To My Invoices?

Editor’s Note: This article is part of a series. View all the articles in this series here: Dear Deb Series

Dear Deb,

My credit card processor says I can charge customers a 3% surcharge when they pay with a credit card. More businesses seem to be doing it. I am considering this. It would save me a lot of money. Should I add the fee?

Signed,
Trying to Save 3%

Dear Trying:

My answer is simple.

No.

Not because it isn't legal. Not because you can't. But because I think it's one of the most expensive business decisions you'll ever make.

For my 70th birthday, I decided to do something special for myself. I booked a luxury facial. There were lasers, special creams, soft lights, dreamy music. It was fabulous. I'd never spent that much money on myself before. I decided, "I'm 70. I've earned this."

And because I am an accountant, I asked the price before I scheduled the appointment. "$600," they told me. A bit pricey, but I only turn 70 once.

Perfect.

I saved my money, booked the appointment and looked forward to treating myself. The facial was wonderful. I walked out feeling relaxed, refreshed and realized growing older requires a much bigger maintenance budget. At 70, keeping the old model running isn't cheap.

Then came the question, “How do you plan to pay?” I whipped out my credit card. I expected to pay exactly what they had quoted me, $600, plus a tip. Instead, the total came to $618.

I looked at the receipt and asked, "Wait a minute. What happened to the $600?" The receptionist smiled and said, "We charge 3% if you use a credit card." I was not happy.

Could I afford the extra $18? Absolutely. That wasn't the point.

The point was that when I asked the price, they told me it was $600. At no point did anyone say, "By the way, if you pay with a credit card, it'll actually cost you more."

If they had told me the facial was $618, I would have made my decision based on $618. Maybe I still would have done it. Maybe I wouldn't have. But at least I would have known the real price before I said yes.

What bothered me wasn't the money. It was the surprise.

Now let me make it even worse.

Before I was ready to pay, I scheduled several future appointments. Another facial. A massage. An eyebrow wax. Plus a few other things that women my age somehow convince ourselves are absolutely necessary.

I looked at her and said, "I'll pay the $18 today. But I'd also like you to cancel every future appointment I just scheduled."

She looked shocked.

I wasn't leaving because of $18. I was leaving because trust had been chipped away over $18.

The salon collected another $18 that day. They also lost thousands of dollars I would have happily spent with them over the coming years. And here's the part they probably never considered. I'm still telling the story. I’ve told friends. I've told family. Now I'm telling you.

That may be the most expensive $18 they ever collected.

The real cost of a surprise fee 

That's why I think businesses ask the wrong question. Instead of asking, "Can I charge this fee?" they should be asking, "What story am I creating?"

Every business decision sends a signal. Your prices tell customers what your work is worth. Your payment process tells them how much you value the relationship.

When customers see a credit card surcharge, they aren't thinking about merchant processing costs. They're thinking, "Really? You're charging me extra just to pay you?"

Research suggests I'm not the only one who feels this way. A 2025 J.D. Power study, reported by The Wall Street Journal, found that 34% of small businesses now add credit card surcharges, and a fifth of restaurants charge additional service fees, up from 16% in 2022. The same reporting explains that behavioral economists call this the "lock-in effect." Once customers have mentally committed to making a purchase, they're much less likely to walk away when an extra fee appears at checkout. In other words, businesses collect the fee because they know most customers won't back out. That may be smart psychology, but I don't think it's smart business.

Think about the things you hate paying for:

• Shipping
• Convenience fees
• Processing fees
• Resort fees
• Ticket fees
• Baggage fees

Nobody wakes up hoping to pay another fee.

Amazon figured this out years ago. One of the reasons Amazon Prime became so successful was that it made shipping feel like it disappeared. Customers stopped thinking about an extra charge every time they clicked "Buy Now." The price they saw became the price they expected to pay.

That's a better customer experience.

I don't see many national retailers adding a 3% fee at the register. Costco. Target. Publix. Home Depot. They understand that accepting credit cards isn't a special service anymore. It's simply part of doing business. They build that cost into their pricing because they know the last thing they want customers thinking about is how expensive it was to pay.

Build the cost into your pricing 

Small businesses often tell me, "I'm just trying to recover my costs."

I understand:

• Rent is a cost.
• Insurance is a cost.
• Payroll is a cost.
• Software is a cost.
• Credit card processing is also a cost.

If your pricing isn't covering your costs, then fix your pricing. Don't make your invoice do the heavy lifting.

You can negotiate better processing rates. You can encourage ACH payments. You can review your margins. There are plenty of ways to solve the problem without making your customer feel like they're being nickel-and-dimed.

I feel the same way about restaurants.

If my dinner bill is $100 and I discover another $3 has been added because I paid with a credit card, I won't be back. The restaurant made three dollars today. They lost one hundred dollars next month, the month after and the months after that.

Customers remember how you made them feel 

Businesses are very good at measuring what they collect. They're not nearly as good at measuring what they quietly drive away.

Three percent isn't really about three percent.

• It's about friction.
• It's about trust.
• It's about the last impression you leave with your customer.

When I walked into that salon, I was excited about celebrating my 70th birthday. When I walked out, I wasn't thinking about the facial anymore. I was angry about the $18 fee.

That's the danger of hidden fees. They don't become part of the transaction. They become the story.

So before you add 3% to your next invoice, ask yourself one question. What story do you want your customers telling after they pay you?

Editor’s Disclaimer
The views and opinions expressed by the author are solely their own and do not reflect the views of The Woodard Report, Woodard Events, LLC, or any affiliated organizations. The content is provided for informational purposes and should not be interpreted as an official position of any Woodard entity.