There are many processors currently on the market trying to entice dental practices with claims such as “Save your practice thousands on credit card processing. Get unlimited processing for just $40 a month!” While this may seem like a good deal, be sure to read the fine print. This isn’t what it seems to be. Essentially, you are surcharging patients 3% to 4% to use their credit card. That’s money the processor keeps—not you. An example of a surcharge (often called a “Cash Discount Program”) is when a patient has a bill of $100 and you charge the patient $104 because they paid with a credit card. Recently, Best Card, endorsed by the MDA for credit card processing, received a call from a dentist asking if it was even legal for a dental office to surcharge credit card processing costs directly to their patients, as recommended by many processing companies. Adding a surcharge is illegal in 11 states, but not in Michigan. And while it may be legal to surcharge patients in Michigan, there are specific reasons that most businesses decide not to surcharge their customers. In the dental business, these reasons are probably even more impactful.
1. Customers hate being surcharged. Recent studies have shown that between 65% and 95% of customers who are charged a surcharge said they are less likely to utilize the service of the business again, thereby threatening your patient base.
2. It’s a huge increase in cost. Many don’t realize that all credit card processors have the same cost to run transactions, so while Best Card makes a very small amount above that set cost, a processor running cards at 4% would make a huge profit margin. You’d be smarter to raise your own costs 4% and keep the profit margin that would have been going to
the processor for yourself!
3. Cards issued for payment by insurance companies will not allow a surcharge. Instead of the customer paying the surcharge on these transactions, you need to figure out the maximum amount you can charge with the 4% surcharge built in. So you’ll be paying the inflated surcharge rate out of your own pocket! And if you surcharge any credit cards, you have to surcharge all credit cards according to Visa/Mastercard regulations.
Best Card offers consistently low rates to ensure that your monthly processing bill is as low as possible, and the average MDA practice saves 24% in card processing fees. If you’d like to see what they can save your practice, call 877-739-3952 or email your recent credit card processing statement to firstname.lastname@example.org.