Half of Consumers Are Highly Likely to Switch Merchants Due to Credit Card Surcharges

A key consideration for merchants considering whether to implement credit card surcharges is the impact of such a fee on credit card users.

Having to pay a credit card surcharge has a negative impact on the consumer satisfaction of about one in five cardholders who are asked to pay a surcharge. 

In fact, 21% of cardholders who were asked to pay surcharges in their most recent transaction say this hurt their views of the merchants, according to “Credit Card Surcharges,” a PYMNTS and Payroc collaboration based on a survey of 2,507 U.S. credit card users. 

Get the report: Credit Card Surcharges 

The demographics who are most likely to say that a surcharge hurt their view of the merchant include baby boomers and seniors, those who do not live paycheck to paycheck and those with an income of less than $50,000.

Fifty-six percent of cardholders said they were highly likely to switch merchants when they were asked to pay surcharges. What’s more, 47% of consumers who were not asked to pay surcharges during their most recent purchases say they would be highly likely to switch merchants if they were asked to do so. 

High-income consumers are more likely to switch than low-income consumers. That’s true among both consumers who were asked to pay surcharges and those who were not asked to pay surcharges during their most recent purchases. 

Younger generations who have been asked to pay a surcharge are far more likely to contemplate switching than older consumers. Conversely, among those who were not asked to pay a surcharge during their most recent purchase, older consumers are more likely than younger consumers to say they would be highly likely to switch merchants if they were asked to do so. 

Millennials are the generation second most likely to switch merchants when they were asked to pay surcharges; however, they are the second least likely to switch merchants if they were only hypothetically asked to pay a surcharge.