Keeping Prices Low: Credit Card Fees

Is there anything more boring than tariffs these days? With everything going on in the world, it seems selfish to focus so much on price increases. Unless you run a company, of course. At that point, tariffs are a fact of life, like all other taxes, too. Taxes usually don’t go up and down on a daily basis via presidential emergency orders, but these are not ordinary times.

The short story is that we currently pay 10% extra taxes (on top of the normal tariffs) on anything we import. Why do we import most products we sell? The simple reality is that there are no domestic manufacturing capabilities for forged cranks/brakes or high-performance bicycle tires. These components have never been manufactured in the United States… Additionally, the U.S. dollar has lost roughly 10% of its value in recent months, resulting in another price increase for imported goods.

Some have suggested to pass through these costs by charging tariff surcharges, but that doesn’t make sense to us. Why punish our customers, who have as little say in these decisions as we do? When costs went up during Covid, we used it as an opportunity to streamline our operations, so we didn’t need to increase our prices. We’re continuing that effort to keep price increases as small as possible.

One major cost is credit card processing fees. Credit cards (and PayPal) are a convenient way to purchase things. For that convenience, credit card companies and PayPal charge a fee—roughly 3% of the purchase price. That’s big business—credit card fees amount to more than $ 100,000,000,000 a year (that’s 100 billion) in the U.S. alone. (That’s why credit card companies offer you mileage and rebates to entice you to use their cards more. And then they just add the cost of those ‘incentives’ to the percentage they charge retailers, further increasing the costs to process credit card transactions.)

Usually those fees are included in the prices you pay, just like warehouse rent or employee salaries. Now we’ve decided to give our customers a choice of whether to pay those fees. If you select payment by credit card or PayPal, the fee will show up separately during checkout. If you pay via e-check instead, there is no fee.

The e-check payment is handled by the same provider who also runs our credit card transactions. It’s just as secure. But the fees are much, much lower—and we’ll pay those. All you need are your bank’s routing information and your account number. Just like your credit card number, the information goes directly to the secure payment processor. For reasons of security, we never see it. Instead, we get a confirmation when the payment goes through, and then we ship your order.

What that means for you: Our recent price increases have been much lower than the increases in our costs. If you prefer the convenience of paying with a credit card or PayPal, we still offer that. The fees don’t amount to a lot on most individual orders. If you prefer not to pay those fees, just choose e-check payment.

It’s all about choices. We don’t believe in selling you things you don’t need—and that includes the services of credit card companies.