Dual Pricing Explained:
How Restaurants Offset Credit Card Fees
Presented by Hospitality Control Systems
Credit card processing fees are no longer a minor expense. For many restaurants, they quietly remove tens of thousands of dollars from profits each year. Dual pricing gives operators a widely accepted way to regain control of those costs.
What Is Credit Card Surcharging?
Credit card surcharging adds a separate fee to a transaction when a guest pays with a credit card. The fee appears after the price is already set and is intended to cover processing costs.
Why It’s Risky
Surcharging is tightly regulated, varies by state, and requires strict disclosures. Errors can lead to thousands of dollars in violations, and guests often dislike seeing an added fee at the end of the transaction.
What is Dual Pricing?
Dual pricing means offering two clearly disclosed prices based on how a guest chooses to pay:
• A lower price for cash or debit
• A slightly higher price for credit cards
The guest sees the pricing before paying and chooses their payment method.
There is no added fee and no surprise surcharge at checkout.
Why Dual Pricing Is the Best Route
Dual pricing does not add a fee.
Instead, it offers two prices upfront, which is legally treated as price differentiation, not a surcharge.
This matters because:
• Prices are disclosed before payment
• No surcharge line item appears on the receipt
• Guests actively choose how they want to pay
• No surprise charges after the fact
For these reasons, dual pricing is permitted in far more jurisdictions and carries significantly less legal risk.
How Much Are Restaurants Paying in Fees?
Most restaurants pay 2.5% to 4% in credit card processing fees.
That adds up quickly.
Example:
A restaurant processing $1,000,000 in annual card sales could pay
$25,000–$40,000 per year in fees.
Those costs come directly out of profit.
How Dual Pricing Offsets Processing Fees
With dual pricing:
• Cash payments receive the lower price
• Credit card payments reflect a slightly higher, clearly disclosed price
The cost of accepting credit cards is built into the credit price, not added afterward.
This keeps pricing transparent, compliant, and easy for guests to understand.
Why Guests Accept Dual Pricing
From a guest’s perspective, dual pricing feels fair and familiar.
They:
• See pricing upfront
• Understand the difference
• Choose how they want to pay
Because there is no surprise fee at the end, most guests view dual pricing as reasonable, especially in bars, cafés, and independent restaurants.
Bottom Line
Surcharging creates confusion and risk, including the possibility of tens of thousands of dollars in fines. Dual pricing is transparent, widely permitted, and easy for guests to understand.
As processing costs continue to rise, dual pricing gives operators a practical solution to protect margins without damaging the guest experience.
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Hospitality Control Systems has supported local restaurants and bars since 1988. If you’re exploring POS options, we’re happy to walk you through the details, answer questions, and help you choose the right fit — including POS systems that can be configured with dual pricing for operators who want more control over processing costs. Skytab, SpotOn, LynxPOS, FocusPOS