Responding to Surcharges

For additional resources, visit the webpage on surcharging.

What Will You Do if Negotiation to Eliminate a Surcharge Fails?

Your organization should prepare in advance for what to do if your efforts to combat a surcharge fail (see related strategies). Discuss the pros and cons of the following options. If possible, create an organization policy and related procedures for surcharge situations. You might want to choose a different option for different suppliers, depending on your relationship with the supplier.

Options 

Evaluate the costs and weigh against the benefits of card usage

  1. Use a different supplier—one who won’t surcharge; this might not be possible and there is still a cost (e.g., time and effort) associated with finding/using another source
  2. Use the same supplier, but pay a different way; like option 1, there are costs related to this option (e.g., setting up the supplier in your AP system and losing out on the benefits of card usage)
  3. Use the same supplier and pay the surcharge, as you can save more (through process savings and the rebate) than the surcharge amount