I remember the first time that I heard of the COVID-19 surcharge. I remember my reaction. “I am mad and frustrated by this.”
I felt upset because we are all struggling right now. We are trying to stay healthy. Millions of people are losing their jobs and having to file for unemployment. Thousands of people are out of benefits and will not struggle more to feed their families. And this local business, wants to charge me a surcharge because of COVID-19? WTF!
A COVID-19 surcharge is a fee added to a customer’s bill, usually as a percentage. This fee, although temporary, is there to help offset the recent surge in operating costs.
It took me a while. Sometimes I am a bit slower at “getting it” than I would like to be, my wife can attest to that… I vented, said some things about the store that I did not mean. I thought about posting to social media and writing a review. I needed to cool off.
After a while, I calmed down. I tried putting myself in the owner’s shoes. What if my costs, especially with the increase in food, doubled in price. How would I keep my door open? Or how would I put food on my own table? I was able to put myself in the owner’s shoes… Suddenly the AH-HA moment hit me. I get it now. I support the surcharge, it actually helps me, not hurts me.
Please know that I do not want to persuade you. I value your opinion. I also acknowledge that my opinion is the unpopular one, and thus may be very wrong…
With that being said, in this post, I am challenging myself to see if I can help you see my perspective.
What Is the COVID-19 Surcharge?
Besides being a bit of a frustration, a COVID-19 surcharge is a fee added to a customer’s bill. On average, I have seen 5%, but some have gone way higher. The idea of this fee is there to help offset the recent surge in operating costs.
Restaurants are doing this because of the cost of food. Food prices have risen significantly due to shortages. Mainly caused by the closing of processing plants. In a CNN article, although the demand for meat increased due to the stay at home orders, processing plants had to close due to recent outbreaks. In fact, beef processing in the US was down 27%, and pork processing was down almost 20%, compared to this time last year
But it is not only restaurants that have the COVID-19 surcharge fee popping up on their receipts. It is also happening with hair salons, doctors and dentists.
The sheer costs associated with constant cleaning and disinfecting puts a strain on most businesses. The extra hours, overtime, loss of efficiency, all adds up.
“We’re just trying to pay the bills so we can stay open until this is over,” Brad White, owner of Goog’s Pub & Grub in Michigan told Fox 17.
Ok, Why Shouldn’t We Be Upset over This?
Ok, so time for the nitty-gritty.
I support the COVID-19 surcharge because you and I benefit from the surcharge. You can label this as selfish if you so please. But to me, it is a win/win for all parties.
Before I go too far into detail, let me make it clear that there should be exceptions to the rule. There are some cases where the fee should not added. If it is going to break your customer, make things harder for them, don’t do it. If it is only a few cents more, and it allows me to enjoy the benefits from this business, the fee should be added.
Side note, whenever I was struggling with a decision, my Dad always pulled out a yellow legal pad. He would draw a line down the middle, and hand it to me. He explained the power of the pro’s and con’s list.
Pros:
- The extra funds help offset the increasing costs in operations and supplies.
- The COVID-19 surcharge may allow them to maintain the employment of their staff.
- The fact that the surcharge states COVID-19, requires the increase to be temporary.
- The temporary surcharge sets confidence with customers that management believes in lower prices.
- If messaging was clear and transparent, it relays respect from the owner.
- It draws attention to a few suppliers and vendors that may be taking advantage of the situation.
Cons:
- The business may see customer backlash if they are unhappy with the fee.
- If a customer is really offended, they may draw negative publicity.
- It may increase tax liabilities.
To me, I see more pros than cons. Besides, it seems that the cons could be resolved if they were informed about the pros. Helping a business I care about, yes. Helping myself avoid future increases? Yes! Helping myself maintain a local source of food or service, yes!
I personally would rather pay a few more points today than have a business raise their prices. I will explain that part more in the section below.
Should Other Businesses Add a COVID-19 Surcharge Too?
Should other businesses add the COVID-19 surcharge? Absolutely if it means any of the following:
- They can avoid permanently closing their business.
- They can avoid laying off employees.
- It stops them from permanently raising their prices.
Permanently raising their prices is a real problem we have. Each time I have been through any kind of recession, a few things happen. We all do amazing and come together to help each other. Staff is reduced, prices increase.
We work more efficiently and longer hours to replace those who have been let go. Then, the economy comes back. You impressed your boss and held the company together. The only issue is, the boss now believes that you capable of doing the job of multiple people on your own. There is no reason to rehire back staff if it can all be handled by you.
As for the prices being increased. Well, the customers are used to the new price, there is no reason to lower the prices back to where they were before. Thus, price increases, become permanent.
How to Properly Add the COVID-19 Surcharge
If you are going to add a COVID-19 surcharge, it is so easy to do it right. Please trust us, we have a lot of surcharging experience.
The difference been a successful surcharge program always comes down to communication.
Be truthful, open, and honest with your staff and your customers. No one should ever be surprised by the fee. If you surprise them, that is the quickest way to an angry customer and a resentful employee.
Put up signs in the entryway, on the menu, on the website, on social media, etc.
Train your staff properly. Make sure they understand the purpose of the fee. It is not to earn more money, it is to help them have a job or benefits, or to purely keep the lights on. They need to relate and want to see you succeed. If they have a bad attitude about it, either you did not relay it right to them, or they should not be on the floor with customers.
One of my favorite things to do is role play with them. Role-play questions, concerns, rebuttals, and how to identify a situation where the fee should be waived.
I would recommend reviewing the messaging and training section of How to Test Your Surcharge Program. There is a lot of goodies there that can really help.
Conclusion
It is not ideal to see a surcharge. It never is. Although, when you take a step back, you may see the good that comes from it.
Yes, it helps keep our local shops open. Yes, it is passed down to the vendors and employees.
It shows you that the owner is less interested in raising the prices on you, long term. Quiet the opposite that most businesses are doing, right in front of our face. Yet, we are not upset at them.
COVID-19 is temporary. The COVID-19 surcharge is temporary.
Your frustration over it is temporary.
The next time that you see or hear of a COVID-19 surcharge, breathe. Put yourself in the owner’s shoes.
That is it, folks. I hope that this post helped shed new light or at least offer a new perspective on the COVID surcharge. If this post was useful, please help me by sharing or leaving a comment below. Your feedback motivates me more than you know. Additionally, if you do not agree with my view and want to help me see your side, please help me.
P.S. About the pro’s and con’s list part. I still don’t like them. I always seem to skew the results subconsciously. I add value and weight to an item, unfortunately balancing them out no matter how hard I try. With that being said, I still do them.
