Auto and truck dealerships are navigating an evolving payment landscape. With the increased use of credit cards for both vehicle purchases and service transactions, processing costs have become a significant expense. One way dealerships consider managing these costs is through surcharging. At the same time, solutions offered by dealer-focused merchant service providers can help balance compliance, customer satisfaction and profitability.

What is Surcharging?

Surcharging is the practice of adding a fee to a transaction when a customer chooses to pay with a credit card, helping businesses offset credit card processing costs. For example, on a $10,000 vehicle purchase, a 3% surcharge would add $300 to cover the processing fee.

While it may seem straightforward, surcharging is subject to several important rules:

1. Credit Only: Surcharges may only be applied to credit card transactions, never debit cards.
2. Disclosure: Dealerships must inform customers before the transaction and itemize the surcharge on receipts.
3. Uniformity: Surcharges must be applied consistently.
4. State Laws: Some states restrict surcharging, though New Hampshire does not. Dealers must still comply with federal and card brand rules.
5. Not a DIY Project: Surcharging requires careful compliance with multiple regulations and card brand rules. Dealerships should not attempt to manage this on their own. Working with a specialized third-party processor, such as Dealer Merchant Services (DMS), ensures proper setup, compliance and ongoing oversight.

Dealer Merchant Services: An Alternative Approach

DMS works exclusively with automotive retailers, providing solutions that reduce credit card processing costs while ensuring full compliance and transparency.

Key Features:

1. Dual Pricing Models: This allows dealerships to present clear options to customers based on payment method, maintaining transparency and avoiding hidden fees.
2. Industry Focus: DMS works exclusively with auto dealers, tailoring its systems and supporting their retail operations.
3. Compliance Support: Training, signage and processes are provided to help ensure rules are followed correctly.
4. Potential Savings: By reducing processing costs, dealerships may significantly lower expenses that would otherwise be absorbed.
5. Integration: Payment solutions often link seamlessly with dealership management systems, simplifying transactions and reporting.

Navigating the Complexities of the Auto Industry

For dealerships, managing payment costs involves balancing profitability, compliance and customer relationships. Credit card surcharging is not a DIY project. Automotive is simply too complex to risk being on the wrong side of compliance.

Dealer-focused merchant services provide the best pathway for dealers to manage expenses more effectively while maintaining compliance, transparency and customer trust. By working with a partner who understands all facets of the auto and truck business, dealership leaders can confidently manage costs while protecting the customer experience.