Surcharging: What you Need to Know for your Bridal Store

Running a successful bridal store comes with its own set of challenges—from managing inventory of gowns and accessories to offering personalized customer experiences. One often overlooked aspect of business operations is payment processing fees, which can significantly impact your bottom line. That’s where surcharging comes walking down the aisle.

Surcharging allows you to offset the cost of credit card processing by passing the fee to customers who choose to pay with a credit card. This strategy has become more common among small business owners, including those in the bridal industry. Before you decide to implement surcharging in your bridal boutique, it’s essential to understand the rules, benefits, and potential risks.

What is Surcharging?

Surcharging is the practice of adding a fee to a customer’s bill when they pay with a credit card. This fee helps cover the costs that businesses incur from credit card processing, which typically range from 1.5% to 3% per transaction. Note: Merchants cannot surcharge more than 3% even if their processing rates exceed 3%. For bridal stores, where sales often involve high-ticket items like wedding gowns, these fees can add up quickly.

Is Surcharging at your Bridal Store Legal?

Yes, surcharging is legal in most states, but there are specific regulations you must follow. Some states, such as Connecticut, Maine, and Massachusetts, currently prohibit surcharging. It’s crucial to verify your local laws before proceeding. Additionally, credit card networks like Visa and Mastercard have their own rules for surcharging, including:

• Providing advance notice to the card networks and your payment processor.
• Displaying clear signage at your store’s entrance and point of sale to inform customers about the surcharge.
• Limiting the surcharge to no more than the actual cost of processing the transaction (up to 3%).
• Surcharging debit cards is prohibited by all card brands.

What are the Benefits of Surcharging at your Bridal Store?

1. Protect Your Profit Margins

Bridal store purchases often involve significant transactions. For instance, a $3,000 wedding gown could cost you up to $105 in processing fees. By implementing surcharging, you can recoup up to 100% of these costs without compromising your profit margins.

2. Transparency with Customers

Many customers understand that businesses face operational costs, and when surcharges on credit card payments are communicated clearly, customers are often understanding and willing to pay the extra fee.

3. Encourage Alternative Payment Methods

Offering incentives for cash or debit card payments can help you avoid significant payment fees altogether. For example, you might provide a small discount for customers who pay with cash, making it a win-win situation. See if cash discounting is right for your business.

Potential Risks to Consider

While surcharging has its benefits, it’s not without risks. Bridal shopping is an emotional and high-stakes experience, and adding fees could potentially discourage some customers. 

Here are some tips that may help mitigate this:

• Be Upfront and Clear: Ensure customers are informed about surcharges from the moment they walk in. Transparency builds trust.
• Provide Value: Offset the perception of added fees by offering exceptional customer service, exclusive perks, or personalized experiences.
• Assess Customer Sentiment: If your bridal store operates in a competitive market, consider how surcharges might affect your brand image compared to competitors.

How to Get Started with Surcharging:

Interested in implementing surcharging at your bridal store? Here is how our partners at Gravity Payments break it down to help you get started: 

1. Legal compliance.

Ensure that surcharging is legal in your state, and maintain accurate records of surcharge amounts, should you ever need to provide this information for legal or compliance reasons

2. Ask your Poppy Consultant.

With Poppy your sales consultant is your integrated processing consultant with Gravity Payments. Let them know you are interested and you can review the Merchant Service Agreement together to understand the terms and conditions. 

3. Notify the credit card brands you accept.

You need to notify credit card companies like Visa, Mastercard, and American Express at least 30 days before you begin surcharging. If you are working with Gravity Payments as your merchant service provider, then this step is taken care of by them. 

4. Be transparent and straightforward.

You are legally required to disclose surcharging clearly at the point of sale and itemize the surcharge on the customer’s receipt. On top of that, you might want to train your staff on explaining your surcharging practices to customers.

Note: By using Poppy Bridal Software, the surcharge amount is automatically added to your sales receipt once the payment is taken.

5. Limit the surcharge amount.

The surcharge cannot exceed your effective rate or regulatory maximums. With Gravity Payments, your surcharge cannot exceed 3%.

6. Hardware & Software compatibility.

Hardware used for surcharging must be certified and pass required card brand fields with the transaction.  If you accept multiple forms of payment, Poppy Bridal Software with Clover devices are surcharge certified and engineered to recognize when you can and cannot surcharge a customer based on their payment method for which surcharges are not allowed (e.g., debit cards, cash, other).

7. Review periodically.

Laws and customer attitudes can change. It’s a good idea to periodically review the legality and customer acceptance of your surcharging practices.

For bridal store owners, surcharging can be a practical way to manage credit card fees without cutting into profits. However, success depends on compliance, clear communication, and a strong focus on customer experience. By handling surcharges thoughtfully, you can protect your business while continuing to help brides-to-be find the wedding dress of their dreams. 

Interested in implementing surcharging at your bridal store with Poppy? Let’s chat!

Book a time with our Poppy consultants or fill out our ‘Get Started‘ form to see if surcharging is a good fit for your bridal store.