Why We Don’t Charge a Credit Card Fee

Every so often, a business decides to “pass along” its credit card processing fee to the customer, as if it is some unusual burden that showed up out of nowhere.

But it isn’t.

It is a normal cost of doing business in modern commerce. And in many cases, charging that fee back to the customer is not just annoying. It is shortsighted. We have chosen not to do it at any of our locations. At The Local Epicurean, For Crêpe Sake and Brown Butter, we do not add a credit card processing fee. At For Crêpe Sake and Brown Butter, we do not even accept cash. We are card only because it makes sense operationally and, in our view, often makes more sense for the customer too.

That position is not just philosophical. There is real research behind it. Robert Cialdini references some of the early work in this area in Influence, and the findings are still striking. In one of the foundational studies, Richard Feinberg found that simply exposing people to credit card cues increased spending behavior, even when they were not actually paying with a card. In restaurant settings, later research found that the presence of credit card insignia increased tips as well, with one study reporting tips that were 4.29 percent higher when diners were exposed to those cues. That should get the attention of anyone in hospitality.

The first takeaway is simple: payment method is not neutral. The form of payment changes behavior. Drazen Prelec and Duncan Simester found that consumers were willing to pay materially more, in some cases up to 100 percent more, when instructed to use a credit card instead of cash. Their conclusion was not that credit cards create irrational people. It was that the payment mechanism itself changes willingness to spend.

More recent research has gone further. A 2021 study published in Scientific Reports found evidence that credit cards do not just reduce the “pain of paying.” They can activate reward-related brain networks associated with anticipation and craving. As MIT Sloan summarized it, credit cards may not just remove friction. They may increase the pleasure associated with purchasing. That matters because businesses often talk about card fees as if the only relevant variable is cost.

But it is not.

If cards tend to support higher spending, higher check averages and even higher tipping in some settings, then the processing fee is not just an expense line. It is attached to a payment environment that can also increase revenue. That does not mean every business should ignore the economics. It does mean the conversation should be more honest. Too many operators look at the merchant processing fee in isolation. They see 3 percent going out and conclude they should claw it back from the guest. What they often fail to ask is what happens on the other side of the equation.

What is the effect on average ticket?

What is the effect on speed at the register?

What is the effect on customer experience when the price at the counter is suddenly not the price on the menu?

What is the effect on trust when a guest feels nickeled and dimed over something that now feels standard almost everywhere else?

In our view, that last point gets overlooked far too often. Hospitality businesses, especially, should be careful about introducing small moments of friction that leave a disproportionate impression. Guests may forget exactly what they ordered. They rarely forget how a transaction made them feel. And there is something about being told, at the final moment, that using a card costs extra that feels petty. Even when the amount is small, the signal is bigger than the dollars. It says: this is your problem, not ours. We do not believe that is the right posture.

For us, card processing is part of the operating model. Just like rent, utilities, software, packaging, linen service or payroll taxes. It is not pleasant. It is not trivial. But it is part of the real cost of running a business in the world as it actually exists. That is particularly true in fast-moving hospitality environments.

At For Crêpe Sake and Brown Butter, being card only is not just about convenience. It simplifies operations. It reduces time spent counting drawers, making change, reconciling cash and handling bank runs. It lowers the opportunity for error and shrink. It speeds up transactions. It creates a cleaner operating rhythm for the team. And for the guest, it removes friction too. No one is standing at the register fumbling for bills. No one is trying to break a twenty for a six dollar coffee. No one is waiting while someone counts coins. The transaction is faster, simpler and more consistent.

That is not anti-customer. In many cases, it is exactly the opposite. There is also a pricing honesty issue here that businesses should take seriously. If a card fee is unavoidable for most transactions, then it should be reflected in how the business prices its product overall, not added as a surprise at the end. Build the economics into the model. Price with discipline. Then stand behind the price. That is cleaner. It is more transparent. And it respects the customer more than posting one price and charging another.

There are, of course, arguments on the other side. Cash avoids fees. Some customers prefer it. There are communities and situations where cash access still matters. And those are real considerations. But for many hospitality concepts, especially ones built around speed, consistency and modern consumer behavior, cards are not some optional luxury. They are the default payment infrastructure. Once you accept that, the processing fee stops looking like an injustice and starts looking like what it is: a cost attached to a system that often benefits both the business and the customer. That is why we do not surcharge for it. We would rather build our model around reality than make a point of charging customers for using the payment method most likely to help the transaction go through smoothly in the first place.

In the end, this is not really about credit card fees. It is about how you think about the guest relationship. You can treat payment as a moment to recover a little margin. Or you can treat it as part of the experience. We think the second approach is better business.

We are in the business of creating experiences, not extracting fees.