BENEFITS


Surcharging Credit Cards: Good or Bad Idea?


by PHIL NIETO S


urcharging patients’ credit card payments is a trend that is seeing another resurgence as dental offices seek to lower overall business costs.


Many credit card processing companies are aggressively promoting this model as a way for businesses to save; however, they often don’t explain the effects — both positive and negative — surcharging can have on a practice.


The payments industry is full of sales jargon and aggressive sales tactics, so it’s good to take a moment to evaluate the types of surcharging programs and considerations a dental practice should think about before deciding to surcharge.


Although the practice is legal in most states, there are important reasons why many busi- nesses, including dental practices, choose not to surcharge their customers. In dentistry, the consequences of surcharging can be par- ticularly impactful, influencing both patient satisfaction and long-term revenue.


THE COSTS OF ATTRACTING AND RETAINING PATIENTS


Before deciding to surcharge, it’s essential to understand the cost of attracting new patients and their value to your practice. On average, dental offices spend between $150 and $300 on marketing for each patient they acquire. Additionally, dental practices face a patient attrition rate of approximately 17 percent, which means they must consistently attract new patients just to maintain their current numbers. Given the average patient generates around $4,500 in revenue across their lifetime with the practice, retaining loyal patients is crucial for sustained growth.


16 focus | SUMMER 2025 | ISSUE 2


The financial risk of surcharging becomes more apparent when considering these num- bers. Nationwide, dental practices process average transactions of about $250. Under a 3 percent surcharge model, the fee on a $250 payment is $10, which is paid by the patient. Although this saves the practice on process- ing costs, that additional $10 fee can be enough to motivate patients to seek services elsewhere. Research shows that more than 60 percent of customers are less likely to return to a business that imposes surcharges.


For dental practices, this can be particu- larly damaging. Consider the losses of the investment to attract a new patient and the expected earnings over the course of the relationship. Losing that patient because of a $10 surcharge represents a significant finan- cial loss. While surcharging increases profits for credit card processors, it may come at the expense of patient loyalty and long-term practice revenue.


WHY MANY DENTAL PRACTICES AVOID SURCHARGING


Surcharging may initially seem like a conve- nient way to offset processing fees, but the long-term implications can be far-reaching. Patients generally dislike surcharges.


Studies indicate that between 65 percent and 95 percent of customers are less likely to revisit a business after being surcharged. In the competitive dental in- dustry, where patient loyalty is crucial, such high rates of customer dissatisfaction can significantly impact a practice’s growth and sustainability.


Moreover, the cost savings are not always as beneficial as they appear. Most surcharge programs require dental practices to pay a flat monthly fee, typically $40 or more, while patients are charged an additional 3 to 4 percent on their transactions. This model effectively shifts the cost of processing fees to the patient, but at a potential cost to the practice’s reputation and patient retention rates.


An additional complication arises with Virtual Credit Cards (VCCs), which are increasingly issued by insurance companies. These cards are programmed with an exact balance and will decline if a surcharge is added. Because industry regulations require that all credit cards be surcharged if any are surcharged, practices would have to lower service fees to accommodate the VCC’s


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