Practically everything costs more these days, from movie tickets to fast food to streaming services. And as if inflation wasn’t enough to cause our spending to spike, more and more businesses are now beginning to charge “convenience fees.” Restaurant bills in particular are one major example of how these convenience fees could be tacking a lot onto your expenses. But what exactly are these convenience fees, and is it possible to avoid them? We’ll answer these questions below.
What are convenience fees?
Considering the fact that convenience fees can be so inconvenient when you're trying to save money, this sure makes for an ironic name. So, what exactly does it mean? As it turns out, a convenience fee refers to the fee a business might chargeyou when you use electronic payment—such as a credit card–rather than cash or a check, because the bank and processor service charges them a transaction fee.
How much are convenience fees?
Every time you pay with a credit card, it costs the business a small merchant fee, typically ranging anywhere from 1%-4% of the transaction amount. In some cases, it will be a small flat fee. A few factors can affect the exact charge, including the type of credit card network used. For example, American Express has the highest fees, charging up to 10 cents per transaction plus 3.3% of the total.
Restaurant charged me 4% to use my credit card today. I haven't seen restaurants doing that in years. And they just started in the middle of the C19 pandemic, when we should be using less cash and more cards. No restaurant pays this much in cc fees. Very infuriating. byu/loveworksdotcom inmildlyinfuriating
How will I know if I'm being charged a convenience fee?
Convenience fees should be disclosed in advance. You'll likely find a note at the bottom of your bill or receipt, stating the percentage and exact amount of money you'll be charged. It may be referred to as a "credit card processing fee."
What businesses charge convenience fees?
In addition to restaurants, you may also be charged a convenience fee for food delivery, concert and movie tickets, or even a rent payment, among other transactions. These are common transactions many people make on a daily basis, so they can really add up over time. But is there a way to avoid them? We'll dive into that question below.
How can I avoid convenience fees?
No one wants to have to pay convenience fees at a restaurant; eating out isn't cheap these days, especially when you add on a tip. Luckily, they aren't completely inevitable. There is one thing you can do: pay in cash.
It could be helpful to ask ahead of time if a restaurant charges a convenience fee. That way, you can always head to a nearby ATM and ensure you're able to cover the cost in cash, saving yourself an extra charge.
Other than that, though, there's not much way around these fees. If you're paying with a credit card, it's just another price you'll have to pay for—well, the convenience.
But, hey, you can always just grocery shop and cook at home, right? It can be much cheaper in the long run... unless you're buying chicken.
READ MORE: These Are the Most Expensive Fast-Food Orders Due to Inflation
