how surcharges work
surcharges are additional fees and or taxes that consumers are required to pay when they buy certain goods and services surcharges are typically added at the final stage of purchase when the buyer pays for the good or service surcharges may be set at specific dollar amounts such as 5 per transaction they may also be based on a percentage of the total price such as 5 the listed cost of some products and services does not include the added surcharge instead the calculated fee is assessed upon acceptance or purchase of the item and appears in the contract or sales and purchase agreement spa or the surcharge appears as a separate line item on your receipt some surcharges are simply baked into the nature of the business for example restaurants may intentionally not serve condiment packets as their business model may try to reduce costs by not handing out additional resources for free bank and credit card surchargesthe automated teller machine atm fee is one that many consumers know very well this surcharge is most often levied by the bank or other institution that owns and operates the machine an atm fee is shown as a set dollar amount per transaction most atm providers waive fees for customers of the sponsoring atm some businesses have added surcharges to compensate for the costs associated with accepting credit cards another name for these fees is a checkout fee this additional fee may be a specific dollar amount or a percentage of the total price of the goods or services purchased examples of surchargesmany industries such as the telecommunications and cable industries regularly use surcharges to offset some of the costs imposed on businesses through local state or federal regulations when these costs increase companies may adjust surcharge amounts rather than the price of the goods they sell the fee is still passed on to the consumer but in a more indirect fashion if regulations raise the burden on a company by 1 per customer the company may increase its regulatory recovery fee by 1 in this way the company avoids having to absorb the loss or the full amount of the government fee efficiently passing it on to the consumer examples of surcharges include regulatory recovery fees added by cable companies to their customer s bills these are imposed to offset the burden of certain service fees imposed by various government entities they also apply fees for sports programming to offset the premium the cable provider pays for the ability to broadcast the events other examples include most surcharges are legal though some states are taking action and disallowing certain types of surcharges for instance 2021 legislation out of colorado imposed limits on how much a surcharge could be in certain cases 