Many dental practices overpay for credit card processing due to hidden fees, but implementing a surcharge strategy -- where patients pay an extra fee for credit cards while debit and checks remain free -- can save practices substantially annually, with most patients continuing to use credit cards for rewards points.
- Only about 10% of dentists know their actual credit card processing rate, which can be as high as 6% instead of the promised 2.8% due to hidden fees.
- A practice generating $6 million annually was able to save roughly $175,000 per year by implementing credit card surcharges.
- An estimated 20% of dental practices currently surcharge, with predictions that this could rise to 80% within five years as costs increase.
- When practices implement surcharges, only 10% to 20% of transactions switch to debit or check payments, as most patients continue using credit cards for rewards.
Ask a room of dentists and team members how many know their credit card processing rate, and Doug Fettig says only about 10% raise their hands. That surprises him, since processing is one of a practice's biggest expenses.
In this episode of The DrBicuspid.com Podcast, host Kevin Henry talks with Fettig, a certified public accountant (CPA) by background who travels the country speaking to dentists and teams about thinking like a CEO and running a better business.
Doug Fettig, CPA.
He is the vice president of partnerships for Top Card Payments, and he has a story that explains the problem: A practice often gets a terminal from its bank, starts processing, and never looks again.
Then an ambitious office manager decodes the merchant statement and discovers the practice is paying 6% instead of the 2.8% it was promised, thanks to hidden fees.
The conversation then turns to surcharging, in which a practice passes the card fee to patients who pay by credit card, while debit cards, health savings account cards, and checks stay fee-free. Fettig estimates about 20% of practices surcharge today and predicts that figure could climb to 80% in five years, a "hockey stick" driven by rising costs for supplies, labs, and payroll.
He cites a practice that was producing about $6 million annually that was paying $200,000 in card fees and now saves roughly $175,000 annually. The surprise, he says, is that patients rarely switch when surcharging is enacted. They still tap the credit card for the points, and only 10% to 20% of transactions are debit or check.
Fettig says the law requires a sign at the front desk. Some practices also send an email notice, though most do not. He stresses that state rules vary and that team training matters as much as the sign. His team provides talking points so the conversation is not abrupt, and a team member can waive the fee for an upset patient, which gives staff peace of mind.
Countering the objection that "I can't ask my patients to pay more," Fettig compares it to a $100,000 cone-beam computed tomography system. Practices do not apologize for the technology or the prices that fund world-class care. Some practices share part of the savings with the team through bonuses and training.
Fettig can analyze a merchant statement in about 15 minutes and offers a guaranteed rate, chairside payment devices, and text-to-pay. He can be reached at [email protected].
Listen to the full conversation below.
