COVID-19 surcharges make financial sense for business, but caution is needed

July 28, 2020

This is a guest post from Ben Walker 

For many Asheville business owners impacted by the coronavirus, reopening after mandated closures presents both new challenges and new opportunities. For some companies, one of those challenges is balancing the need to keep prices low for budget-conscious customers during the recession while also covering added costs associated with cleaning, sanitizing, and potentially operating at reduced capacity.

COVID-19 surcharges may seem to be the best option for coping with these new expenses. By adding a fee to offset these added costs, you can be transparent with customers so they understand why prices may seem higher while still ensuring you have the funds needed to maintain a safe space for customers and staff.

However, consumers aren’t necessarily receptive to these charges, so companies who choose to implement them should be cautious.

What is a COVID-19 surcharge?

COVID-19 has undoubtedly raised the cost of doing business. It’s forced companies, including restaurants, to limit the number of customers while enhancing their cleaning protocols, provide staff with personal protective equipment, and in some cases, reconfigure their space before reopening and install new fixtures to facilitate social distancing.

Faced with these added expenses, many companies have implemented COVID-19 surcharges to offset costs. Some businesses are simply raising the price of goods or services across the board to account for the fact it’s now more expensive to provide them. Others are adding a percentage onto the bill and separately labeling it as a coronavirus charge.

Although it may seem intuitive to raise the price as operational costs increase, customers — who may be facing economic hardship of their own — are not necessarily comfortable with companies passing these costs on to them. In fact, in a recent survey about COVID-19 surcharges, FinanceBuzz found that only one in five Americans think it’s fair for businesses to charge an added fee.

Should I implement a COVID-19 surcharge?

If you’re considering a COVID-19 surcharge but are worried about risking the ire of your customer base, there is some comforting news — customers are much more willing to pay a higher price when the surcharge pays for certain expenses.

According to the FinanceBuzz survey, higher cleaning costs were the most justifiable reason for an added charge. Forty-seven percent of respondents indicated they wouldn’t mind paying a higher price for increased sanitation.

Most customers were also comfortable with businesses raising prices to make up for lost business due to being forcibly shut down. Forty-one percent of respondents said this is an acceptable reason for a COVID-19 surcharge. And four in 10 indicated they were OK with an added cost if the money was used to buy safety equipment for staff.

So if you’re planning on passing along the cost of sanitization, lost business, or protecting your staff, your customers are much more likely to be receptive to paying a little extra than if you’re raising prices or tacking on an added fee for other purposes.

Tips for business owners

When charging customers a COVID-19 surcharge, it’s essential to go about it the right way. There are a few key things you can do to reduce the likelihood your customers will object to the added costs.

Be transparent
One of the most important is to be transparent. As many as 15% of consumers said they didn’t know if they’d paid an added fee on a recent purchase due to coronavirus. You don’t want customers to feel they were misled or kept in the dark. If you choose to implement COVID-19 surcharges, explain why you went this route. Being transparent with your customers will help cultivate trust.

Be upfront
You’ll also want to make sure your customers aren’t surprised by an added cost. Nearly four in 10 survey respondents (38%) didn’t know they’d paid a COVID-19 surcharge until after making a purchase. No one likes to be surprised by an unexpected charge on their bill, so being upfront could head off misunderstandings and ensure you don’t anger your client base.

Be savvy financially
Finally, consider taking steps to offset your costs so you can keep surcharges as low as possible (or avoid charging them at all). Having the right business credit card enables you to earn rewards, like cash back on all your business purchases. Also, look into buying cleaning gear or protective equipment in bulk online or from a wholesale store to keep your costs low.

Final words

Although consumers have mixed feelings about paying COVID-19 surcharges, one thing is certain. The more affordably you can adjust to the new reality, the less you have to raise prices and the happier your customers will be — especially as they cope with financial stresses during these difficult times.

Ben Walker is a credit cards and travel writer at FinanceBuzz who loves helping others achieve their travel goals through financially-sound decisions. For nearly a decade, he has been using credit card points and miles for the sole purpose of traveling the world. Ben has been featured in The Washington Post, MSN,, and