Surcharging in the Service Department: Best Practices

Service departments process the highest volume of payment transactions at most dealerships. That makes them both the biggest opportunity for surcharge recovery and the place where implementation matters most.

Get surcharging right in service, and you're recovering thousands monthly. Get it wrong, and you're creating customer friction at scale.

Here's how to implement service department surcharging effectively.

Why Service Is Different

Volume Matters

A busy service department might process 50-100+ transactions daily. That's:

• 50-100 opportunities to recover fees
• 50-100 potential customer conversations
• 50-100 chances for something to go wrong

Transaction Size Varies

Service transactions range from:

• $39 oil change
• $500 brake job
• $3,000 transmission repair

The surcharge discussion feels different at each level.

Repeat Customers

Unlike vehicle sales (one-time or infrequent), service customers return:

• Oil changes every 3-6 months
• Various repairs over years
• Long-term relationship at stake (something NADA emphasizes in customer retention studies)

How you handle surcharging affects ongoing relationships.

Setting Up Service for Success

Terminal Configuration

Ensure service terminals:

• Correctly identify credit vs. debit
• Apply surcharge automatically to credit
• Display surcharge before customer confirms
• Print surcharge on receipt clearly

Test thoroughly before going live.

Integration with DMS

Surcharge should post correctly to repair orders:

• Total payment includes surcharge
• RO shows correct customer payment
• Reporting captures surcharge revenue

Work with your processor to verify DMS integration handles surcharges.

Service Advisor Stations

If service advisors have payment capability:

• Same configuration as cashier
• Same signage requirements
• Same training needed

Staff Training: Service-Specific

The Service Advisor Conversation

Service advisors present repair costs before payment. This is an opportunity to mention surcharging naturally:

At estimate stage: "Your total will be approximately $450 plus tax. Just so you know, we do have a small fee for credit card payments — about 3%. Debit, cash, and check have no extra charge."

At pickup: "Your total is $467.50. Will you be paying by card today? Great — and just to confirm, there's a 3% fee on credit cards, which comes to about $14. Did you want to stick with credit, or switch to debit?"

The Cashier Conversation

Cashiers handle the actual transaction. They should:

• Point to signage when customers approach
• State the surcharge amount in dollars
• Offer debit as alternative

Example script: "Okay, your total is $467.50. I see you're paying by credit card — the credit card fee adds $14.03, making your total $481.53. Would you like to proceed with credit, or switch to debit for no extra fee?"

Handling Pushback

"I've never paid this before." "We implemented this recently. It's the fee the credit card companies charge us, and we're passing it along rather than building it into everyone's prices."

"That's ridiculous." "I understand — it does add up. If you'd prefer, you can use debit, cash, or check with no fee at all."

"Just take it off." "I can't remove it for credit cards — it applies to everyone. But I can switch you to debit if you have a debit card?"

"I want to talk to a manager." "Absolutely, let me get someone for you." (Manager should have same talking points)

Signage for Service

Drive Lane / Entry

Before customers even enter:

• Clear sign visible from drive lane
• "Credit card surcharge applies"
• Visible but not intrusive

Service Write-Up Area

Where advisors meet customers:

• Counter signage
• May be on digital displays
• Referenced during estimate conversation

Cashier Window

Final checkpoint:

• Prominent signage at register
• On card reader screen if possible
• No customer should be surprised at payment time

Receipt

Clear surcharge line item:

• "Credit Card Surcharge: $14.03"
• Separate from subtotal and tax

Handling Common Service Situations

The Quick Oil Change

Small transaction, quick turnaround.

Approach:

• Signage does most of the work
• Brief verbal mention
• Don't over-explain

Reality:

• $3-4 surcharge on $40-50 transaction
• Most customers accept
• Speed is priority

The Big Repair

Larger transaction, more consideration.

Approach:

• Mention at estimate (so no surprise)
• Confirm at payment
• Emphasize debit option

Example on $2,000 repair:

• Surcharge: $60
• Worth mentioning in advance
• Customer may plan payment method accordingly

The Multi-Visit Customer

Regular maintenance customer you see frequently.

Approach:

• Acknowledge the relationship
• First time explaining is key
• Subsequent visits are easy

Example: "I know you've been coming here for years, Mr. Smith. We did start a small surcharge on credit cards recently — just the fee the card companies charge us. You can always use debit to avoid it."

The Warranty + Customer Pay Split

Part warranty, part customer responsibility.

Approach:

• Surcharge only on customer pay portion
• Make sure it's calculated correctly
• Explain clearly what's being surcharged

The Rental/Loaner Deposit

Security holds and deposits.

Note:

• Authorizations (holds) typically don't get surcharged
• Actual charges do
• Verify your setup handles this correctly

Metrics to Track

Surcharge Revenue

Track monthly surcharge collected:

• Gross surcharge revenue
• Compare to previous processing costs
• Calculate net savings

Payment Method Shift

Monitor changes in payment mix:

• Credit card percentage
• Debit card percentage
• Cash/check percentage

Some shift is expected and fine.

Customer Complaints

Track surcharge-related complaints:

• Volume of complaints
• Resolution rate
• Patterns (certain staff, certain customers?)

Should decrease after initial implementation.

Transaction Counts

Watch for any impact:

• Are customers splitting transactions?
• Any decline in service visits?
• (Usually minimal impact)

First Month Checklist

Week 1

☐ Launch surcharging ☐ Monitor every cashier shift ☐ Address any technical issues immediately ☐ Gather staff feedback daily ☐ Track customer reactions

Week 2

☐ Review first week complaints ☐ Refine scripts based on feedback ☐ Check that signage is still visible/correct ☐ Verify DMS posting is accurate

Week 3-4

☐ Full reconciliation review ☐ Calculate actual recovery vs. estimate ☐ Assess staff confidence level ☐ Plan for ongoing monitoring

Handling Edge Cases

Customer Disputes Surcharge After Leaving

• Review transaction records
• If surcharge was properly disclosed and applied: explain compliance
• If error occurred: refund surcharge and correct issue

Card Shows as Credit but Customer Says It's Debit

• Some cards process as credit even when they're debit cards
• Your system should catch this
• If wrongly surcharged, refund and investigate

Corporate Fleet Card

• These are typically credit cards
• Surcharge applies
• Customer may need to inform their company

Gift Cards / Prepaid Cards

• Usually no surcharge (not credit)
• Verify your terminal identifies correctly

When to Make Exceptions

Our recommendation: Don't.

Inconsistent surcharging:

• Creates customer expectations for exceptions
• Can violate card network rules
• Makes staff conversations harder

If you're going to surcharge, surcharge consistently. If you want to not surcharge certain situations, don't surcharge at all.

One exception: If you want to waive surcharges for commercial/fleet accounts, that can be structured — but get it right legally.

Making It Permanent

After 90 Days

• Surcharging becomes normal
• Customer complaints should be rare
• Staff conversations are automatic
• Recovery is steady

Ongoing Maintenance

• Keep signage current
• Train new staff
• Audit periodically
• Adjust rate if costs change

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Get Service Department Surcharging Right →

From terminal setup to staff training, we help service departments implement surcharging smoothly and start recovering fees immediately.