CLEVELAND — Jenn Wirtz owns Der Braumeister in Cleveland and keeps track of her credit card fees. She said the credit card company charges her a fee every time a customer pays with a card.

She said the fees can take a chunk out of her profits, especially if it’s for a larger catering job.

What You Need To Know

  • Credit card fees can take a bite out of a restaurant's profits

  • The restaurant is charged a fee by a credit card company when a customer uses a card to pay a bill

  • Credit card fees can vary depending on the card, and how it's processed on a POS machine

“Obviously our catering jobs are, you know, one job can be a $10,000 job," Wirtz said. "So they’re getting a cut anywhere from 3 to 4% depending on what type of card they are using. Whether it’s a high-end card or a low-end card, whether it’s a debit card, whether it’s a credit card.”

She said the fees have increased over the past year or two. So she’s used a third-party app to re-negotiate the fees, but she said they’re still taking a noticeable bite out of the bottom line.

“This is a passive income for these companies," Wirtz said. "This isn’t requiring anything on their part other than existing software. There’s also the payments that we make for the software, the handhelds. The POS terminals you see around the bars.”

According to the Nillson Report, a publication that covers the mobile payment industry, U.S. merchants paid a record $160 billion in credit card processing fees in 2022 — a 16% increase from 2021. All of this happened as credit card spending increased by 18.7% from 2021 to 2022.

Wirtz said about 80% of her transactions are made though a credit or debit card.

“Whichever way my customer wants to pay, I have to be able to give that to them," Wirtz said. "And I’m not in a position right now to deny someone with a credit card.”

The Electronic Payments Coalition represents the credit card industry. They responded to a request for comment by saying that fees are less expensive for processing credit card transactions with a bank compared to processing cash payments. They also cited a report they released in May that found the average interchange rate has remained flat for the last seven years.

While credit card fees are not specific to the restaurant industry, Wirtz said smaller spots like hers feel the pinch, since their profit margins may be thinner than a larger restaurant or business.

The Electronic Payments Coalition added that business owners can negotiate their credit card fees, like Wirtz did, but she said that's not always a quick process. 

"People don't have time to really look at those statements line-by-line, and then, again, take the time it takes to then re-negotiate your rates," Wirtz said.

Wirtz said she hasn’t had to increase prices to offset the credit card fees yet, but she said it’s something she may eventually have to consider. 

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