As credit card processing fees rise, beauty and wellness business owners are looking for ways to protect their margins without having to raise service prices across the board. That’s where surcharging comes in – the practice of adding a small fee to credit card transactions to cover processing costs.
Keenly responsive to industry shifts, Zenoti is helping businesses navigate this trend. In this post, senior product marketing manager Shivani Salhotra covers why we developed the surcharge feature, how it helps businesses save money, and the best ways to implement the feature without disrupting the guest experience.
What drove development of the surcharge feature?
This feature is a response to both customer requests and broader industry trends.
Credit card processing fees are often a pressure on the bottom line for any business. Imagine a salon processing $500,000 annually in card payments. With a 3% fee, that’s $15,000 straight to processing costs. Instead, those fees could fund new equipment, staff bonuses, or marketing efforts. It’s a reminder of how small percentages can impact a beauty business’s profits.
"On one hand, rising credit card processing fees were eroding profit margins for our customers," Shivani said. "Business owners needed a way to offset these costs without a price hike, which could make them less competitive."
Surcharging has also become more common in other sectors, like restaurants, so guests are increasingly familiar with it. With some card networks and jurisdictions now allowing merchants to pass on these fees (within certain limits), creating an automated, compliant solution for Zenoti Payments was a logical next step.
"Our customers were asking for this," Shivani added. "We even had potential customers choose other software platforms because we didn't offer it. It was clear we needed to build this feature."
How does the Zenoti Surcharge feature compare with competitors' products?
Not all solutions are created equal, and Shivani highlights three key areas that make our offering unique.
- Compliance automation: "This is a big one," she noted. "Zenoti automatically enforces continually evolving U.S. state laws, card-network caps, and debit-card restrictions. Our competitors often leave this complex monitoring to the business owner, which can be risky."
- Multi-channel support: The surcharge is disclosed consistently everywhere a guest might pay. This includes the front desk (POS), your online webstore, the customer mobile app (CMA), mirror mode, and payment terminals.
- Full or partial fees: Businesses can choose whether to pass on the entire processing fee or just a portion of it. No other beauty and wellness software offers this flexibility. This level of control helps businesses find the right balance for their brand and clientele.
What feedback have we received from businesses using this feature?
The response has been overwhelmingly positive. Shivani shared a success story from Van Michael Salon, a multi-location brand in Atlanta. General manager Carly Gordineer was at first concerned about how guests would react. Given how common surcharging has become, however, along with debit cards helping guests avoid the fee, the 9-location brand decided to move forward. The result? Guest reactions were largely neutral and quiet, with only a few voicing concerns. Even those who were initially upset have returned.
“As business costs increased, and credit card fees increased, we really thought that surcharging would be a way to bring some money back to our bottom line without having to consistently increase our prices to try to keep up with changing costs.”
Carly Gordineer, General Manager, Van Michael Salon
Notably, the financial impact of activating the feature isn't just about profit; it's money Van Michael can reinvest into the business for training staff, enhancing their luxury service delivery, and improving employee benefits.
Let's hear from Carly.
Carly also praised the onboarding process, noting how Zenoti provided communication templates and hands-on support to ensure a smooth, compliant rollout.
How does Zenoti ensure surcharging doesn't negatively impact the guest experience?
Transparency is key. The system prevents surprises by design, according to Shivani. "It shows guests the surcharge information before they complete their payment, no matter where they are paying," she said. "The surcharge is also listed as a separate line item on receipts, so everything is clear."
Businesses receive best practices for communicating the change, including front-desk verbiage. Staff training is also crucial, so your team can confidently explain the policy and the payment alternatives, like debit cards, which don't incur a surcharge.
After all, a large majority of consumers seem to understand: Data shows 85% pay credit card surcharges without issue, and some earn credit card rewards that help offset the cost of surcharges.
Final thoughts
Implementing a surcharge is a business decision, and it’s optional within Zenoti. Multi-center brands can enable or disable the feature at the individual location level, maintaining total control.
If you’re on the fence, it's worth noting that credit card payments account for 60–75% of transactions at Zenoti-powered businesses. This represents a major portion of revenue, but also a significant source of processing fees. By offsetting these fees, beauty and wellness businesses like salons, spas, and medical spas can protect their bottom line and free up funds to reinvest in what truly matters – their staff, their services, and their guests.
