Advice adding the credit card service fee to invoices

You’ve touched on an important issue that most us face. Balancing customer convenience, revenue protection, and administrative efficiency can be challenging, but there are strategies to address this. Here are some suggestions for each aspect of your question:

1. General Approach to Credit Card Fees

• Transparency: It’s great that you’re focused on being upfront with clients. Transparency helps build trust. Always clearly state any potential fees on your estimates, invoices, or contracts so clients are aware of their payment options and associated costs from the start.
• Legal Compliance: While it’s legal in Colorado and many states to pass on credit card fees, ensure your approach complies with any card network rules (e.g., Visa or Mastercard). These often require explicit disclosure of the fees.

2. Strategies for Handling Fees

Option A: Absorb the Cost as Overhead

• Many businesses choose to absorb credit card fees as a standard operating expense and factor it into their overall pricing. While this may slightly increase your costs, it simplifies transactions for clients and eliminates the risk of administrative hiccups.  This is what we do at Griffin Waste Utah.
• Pros: Simplifies billing, improves customer satisfaction, and makes you more competitive in markets where clients compare bids.  Customers never feel like you "nickel and dime" them, if it is just $**bleep**.XX dollars.  It appears there are no games.  Let your competitors offer the more confusing (to the client) options, which complicate the billing.
• Cons: You bear the costs directly, which can eat into your margins if not carefully managed.  With Jobber, it is a known fee, so it easy to manage.

Option B: Offer a “Cash Discount”

• Rather than explicitly charging a fee for credit card payments, you can offer a small discount (e.g., 2-3%) for clients who pay by cash, check, or bank transfer. Frame it as an incentive rather than a penalty for credit card use.  You mention this, and it is way to save the fees.  But as a company that works mostly for individual clients (you said you were a tree-servicing business) I'd say making it simple is best.  One price.
• Pros: Positive framing can improve client perception and encourage cheaper payment methods.
• Cons: Discounts may reduce your revenue slightly, though likely less than absorbing all card fees.

Option C: Directly Pass on the Fee

• If you prefer to pass credit card fees to clients, clearly state that a service fee will be added for credit card payments. For example: “A 2.5% processing fee will be applied to all credit card payments.”
• Implementation Tip: Jobber supports automatic fee calculations to avoid manual adjustments. 
• Pros: Protects your margins.
• Cons: Risk of pushback from clients who dislike additional fees.  Some clients will see this as "being cheap."

3. Streamlining Payment Processes

• Avoid Administrative Messes: To prevent the refund/reinvoice issue you mentioned, consider including multiple payment options in your invoices with clear terms. For example:
  • “This invoice reflects a 2.5% service fee for credit card payments. Clients paying by debit, check, or ACH transfer are eligible for a fee waiver.”
• Payment Portals: Jobber let clients select their payment method before completing a transaction, automatically adjusting fees accordingly. 
• Educate Clients: During the initial client onboarding or estimate phase, communicate payment options and associated costs. This reduces surprises and builds understanding.  But, I fear it causes misunderstandings when it comes time to collect payment.

4. Practical Tips to Keep in Mind

• Competitive Positioning: Assess whether your local competitors charge similar fees. If most absorb credit card costs, passing fees to clients could make your bids less competitive.
• Customer-Centric Options: If a client is unhappy about the fee, consider absorbing it in specific cases to maintain goodwill, especially for high-value or repeat customers.
• Tracking Fees: Track how much you’re spending annually on credit card fees and compare it to the cost of offering a cash discount or higher pricing overall.

Closing Thought: The right approach will depend on your client base and business goals. Whichever strategy you choose, consistency and clear communication are key. It’s also worth testing different approaches (e.g., absorbing fees for a quarter vs. passing them on) to see what works best for your business. Good luck streamlining your process and protecting your margins!  My business is different from yours--I rent dumpsters, you manage trees.  I don't know how different our customers are, but we've chosen to absorb the fees, and make payment simple, straightforward, and with no surprises.  For us, it is the right way.  For you, well, you seem to understand these issues, it is just a matter of choosing which works best for your clients (not for you!). Your business, and mine, are both here to help our clients!