Surcharging Doesn’t Always Save: Here’s What Every Dental Manager Needs to Know
Credit card surcharging programs are increasingly being marketed to dental practices as a simple way to offset rising processing costs. On the surface, the pitch is appealing: pass the fee to the patient, reduce overhead, and protect margins. But for dental office managers responsible for both financial performance and patient experience, these programs deserve a much closer look.
The reality is that many surcharging programs—especially those proposed directly by credit card processors—come with hidden risks, misleading claims, and long-term consequences that aren’t always disclosed upfront.
Processors often position surcharging as a “no-cost” or “zero-fee” solution. In practice, it’s rarely that simple. Many programs still include monthly service fees, compliance or “non-cash adjustment” fees, and higher base processing rates hidden behind the surcharge structure. What appears to eliminate costs may simply repackage them in a less transparent way. Without a detailed audit, dental offices may end up paying the same, or even more, than they were before.
Merchant Advocate’s dedicated AADOM representative, Cheryl McKenna, has had firsthand experience with this with a prominent dental client. “We negotiated an excellent rate for a practice,” says McKenna. “But then their bank called and talked them into surcharging patients by promising it would ‘save a significant amount of money’.” Instead, the bank hiked up the practice’s net effective rate from 1.83% to 1.87%, increasing their monthly fees.
Compliance is More Complicated Than Advertised
Surcharging is governed by a patchwork of card brand rules and state regulations. These rules dictate how fees can be disclosed, how much can be charged, and how transactions must be processed.
Common compliance pitfalls include:
- Improper receipt language
- Incorrect fee calculations
- Failure to notify card networks properly
- Applying surcharges to debit cards (which is prohibited)
Processors may promise “full compliance,” but enforcement responsibility ultimately falls on the dental practice. Mistakes can result in fines, forced refunds, or even account termination.
Dental practices are not typical retail environments. Patients often associate healthcare with trust, transparency, and care—not transactional friction. Introducing surcharges can create confusion or frustration at checkout, lead to negative reviews or complaints, and worst of all, damaging long-term patient relationships.
Even small fees can feel significant in a healthcare context, especially when patients are already managing insurance complexities and out-of-pocket costs.
Other factors to consider are insurance company policies, including price caps, because fee passing can exceed them and cause billing issues. And don’t forget about tax time! The 1099-K generated by your processor usually includes the surcharged amount, not what the practice actually receives in payment.
Who Benefits Most
One of the most overlooked issues is how processors benefit from surcharging programs. In many cases, processors: increase their margins within the program structure, often lock practices into longer-term agreements, and try to bundle surcharging with other services that are difficult to unwind.
Because surcharging is positioned as a “solution,” office managers may not realize that the processor’s incentives are not always aligned with the practice’s best interests.
Further, implementing a surcharge program isn’t just a switch you flip—it requires operational changes. The front desk staff will inevitably have to explain the fee to patients, handle objections and confusion, and ensure the correct payment routing by choosing credit versus debit. This adds friction to an already busy workflow and increases the likelihood of errors at the point of payment.
“Doctors tend to think, ‘Everything is fine, we’ve had no negative feedback,’ but they’re not the ones interacting with patients day in and day out at the front desk,” says McKenna. “It’s during checkout when they see a patient’s face drop or hear their objections when they realize it’s going to cost them an additional 3 percent to use a credit card.”
Before adopting a surcharging program, dental office managers should evaluate other ways to control processing costs. It would benefit to conduct a third-party audit of current fees, and to brush up on card brand and state regulations.
Surcharging programs are not inherently bad, but the way they are sold to dental practices often lacks the transparency and nuance required for an informed decision. For dental office managers, the key is to look beyond the surface-level promise of “no fees” and evaluate the full picture: financial impact, compliance responsibility, patient experience, and long-term flexibility.
Before signing any agreement, it’s worth asking a simple question: Who really benefits from this program? It always helps to work with a trusted third party such as Merchant Advocate. As a longtime partner, AADOM members can get a free, no-risk analysis by clicking here.
About our Sponsor
Merchant Advocate is the leading expert in cost-reduction services for businesses that accept credit cards. They have saved clients over $300 Million in excess fees without changing processors and believe in customer transparency above all else and have worked with AADOM clients for close to a decade.
