The Pros and Cons of Convenience Fees for Merchants


Due to the expansive list of payment options, most customers expect that they can pay for their purchases in whichever way they please. While offering multiple payment methods makes merchants and their businesses more accessible to their clientele, additional costs are involved when accepting these options, which could impact your overall profits.

To offset these costs, merchants can choose to implement convenience fees on top of the original transaction amount. Doing so may help merchants shift customers’ paying habits away from using methods that could cost the business more money in the long term.

However, charging convenience fees affects businesses, which is why it helps to know their advantages and disadvantages. Continue reading below to learn more about the pros and cons of convenience fees for merchants.

Convenience Fees

Not to be confused with surcharges, convenience fees exclusively apply to alternative payment methods, such as when a customer pays for goods online rather than in person.

Because online payments are a non-traditional method of paying for a service, merchants often add convenience fees on top of the original amount. Furthermore, the customer pays the cost as part of having the privilege of completing their purchase more conveniently.


Implementing a convenience fee allows merchants to introduce new ways for customers to purchase products and pay for services. To clarify, instead of the standard in-person transaction that involves a merchant’s POS, their business can now offer the option of accepting phone or online payments.

Businesses can increase sales by appearing more convenient to their customers, thus improving the merchant’s bottom line. Streamlined payment options also help contribute to a merchant’s legitimacy, thus building trust and improving customer satisfaction.


Conversely, you can’t weigh the pros without being aware of the cons. Merchants implementing convenience fees have to comply with regulations imposed by major credit card brands. For instance, businesses will need to disclose the implementation of convenience at the time of the transaction.

If a merchant does not state the disclaimer, customers can file complaints and chargebacks with their credit card company, thus setting up a chain of severe consequences for the business. Also, convenience fees could deter patrons who don’t want to pay an extra fee for a product or service, regardless of the payment method.

A merchant should consider the pros and cons of convenience fees when wanting to offer customers new ways to pay for goods and services. Convenience fees may not be the best option if you believe the fess could deter business.

But if the addition helps your company become accessible to customers, convenience fee implementation can benefit all parties. For more information, don’t hesitate to contact us today!

If a merchant handles riskier transactions, they’ll work with high-risk credit card processing companies like us at Electronic Transfer. We provide high-risk businesses with payment gateways to offset additional costs caused by alternative payment methods.