What Is a Surcharge Fee?

What Is a Surcharge Fee
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A surcharge fee is an extra cost added to a bill the consumer is already expected to pay. Surcharge fees are imposed for a variety of reasons, including fuel costs, services, travel time and equipment use. A surcharge may fee be a flat rate or calculated as a percentage of the original bill.

Tip

A surcharge fee is an extra charge or fee that's added to the cost of goods or services, which is in addition to the base cost.

Restaurant Service Fees

Many restaurants impose a surcharge for parties of more than six or eight people. Some restaurants may add a service fee to every patron's bill instead of asking for tips. Restaurant service fees are usually calculated as a percentage of the total bill. One of the most common surcharge rates is 18 percent, although some restaurant owners may charge higher or lower amounts for their service.

Fuel Surcharge Fees

Fuel surcharges are common among companies that transport goods or people. Businesses such as trucking companies that are involved in hauling large loads often use fuel surcharges to curb the cost of powering their vehicles. Many airlines also require passengers to pay a surcharge to cover fuel fees.

Companies may calculate fuel surcharges based on the miles traveled, the weight of the load, the amount of fuel used or as a percentage. These surcharges usually vary and are based on the current price of fuel. Some companies will only impose a fuel surcharge when the price of fuel rises above a certain level.

ATM Surcharge Fees

Many banks apply a flat-rate surcharge for the use of their ATM machines by non-customers. Most banks also charge a fee to their customers when they use an ATM machine owned by a different bank, so someone who makes an out-of-network withdrawal may pay two separate surcharges.

Reasons for Surcharge Fees

Many businesses use surcharges to cover fees not addressed in the basic cost of their services. For example, fuel surcharges are necessary to compensate for excess fuel costs and restaurant service fees supplement the income of kitchen staff. Some businesses may apply extra fees to entice customers to behave in a certain way.

For example, banks charge ATM fees to non-customers in hopes that they will be encouraged to open an account. Likewise, banks charge out-of-network fees to their own customers so that they will avoid using ATM machines owned by other banks.

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