Merchant Advocate CEO Eric Cohen addresses the hidden risks of surcharge programs and how they impact relationships with your dental patients.
Interview by Stan Goff, Senior Managing Editor
As operating costs continue to rise, many dental practices are looking for ways to protect their margins. One increasingly popular option is surcharging programs, which allow practices to pass credit card processing fees onto their patients.
According to Eric Cohen, CEO of Merchant Advocate, a firm that helps businesses reduce merchant processing costs without changing providers, these programs might not be the simple fix they appear to be.
Dentistry Today sat down with Cohen to discuss the hidden risks of surcharge programs, how they impact patient relationships, and why dentists might want to take a closer look at the fine print.
Dentistry Today (DT): Surcharging seems like an easy way for practices to cut costs. What’s the catch?
Eric Cohen (EC): On the surface, surcharging sounds like a win. Why not pass credit card fees on to the patient and keep more of your revenue? In practice, it’s more complicated. Several of these programs are marketed aggressively by processors who make it sound like a no-brainer, but they often fail to disclose key risks.
There are compliance issues as not every state allows surcharging, and card networks like Visa and Mastercard have strict rules around how surcharges are disclosed, how they’re calculated, and when they can be applied. Businesses often unknowingly violate these rules, which can lead to penalties or even the loss of processing privileges.
Dental practices must also consider their contracts with insurance providers, which may include clauses regulating how payments are processed, if there are ceilings or set prices for covered services or products, and whether additional fees can be passed on to patients. Violating these contracts could lead to reimbursement issues or even termination of the provider relationship.
DT: Can you give an example of what those violations might look like?
EC: A common mistake is applying a surcharge to debit card transactions, which is prohibited under card network rules, even if the debit card is run as “credit.” Another common violation is not registering properly with the card networks or failing to provide the correct signage and disclosures.
DT: What about the financial side? Don’t surcharges help practices recoup what they’re losing to processor fees?
EC: That’s the other big myth. Let’s say a practice has an effective processing rate of 2.1%, their actual cost to run a credit card. Surcharge programs must charge a standard percentage. If they add a 3% surcharge, it looks like they’re covering the fee and then pocketing the rest. That extra 0.9% doesn’t go to the practice; it goes to the processor. The practice takes on more liability, more compliance risk, and potentially damages patient relationships, while the processor pockets the spread. It’s not a break-even situation. It’s an additional profit center for the processor—the one who is controlling the cost of the fees to begin with!
DT: In a field like dentistry, where trust and patient experience matter, does surcharging carry a reputational risk?
EC: Absolutely. Dentistry is a relationship-driven business. Patients come back year after year, sometimes with their families, and they trust their provider. When you start tacking on unexpected fees, especially for something like using a credit card, it can feel transactional or even exploitative.
We’ve heard from practices that patients push back, delay payments, or quietly switch providers over surcharges. If you’re saving a couple of thousand dollars a year on fees but losing loyal patients in the process or causing additional aggravation to your office manager or receptionist, it may not be worth the tradeoff.
DT: So, what should dental practices do instead? Are there better ways to manage credit card costs?
EC: There are smarter, safer strategies that don’t risk your compliance or your patient relationships. It’s crucial to clearly understand what you’re being charged. Many practices don’t realize they’re overpaying because of hidden fees and markup from the processor.
Negotiating your processing contract is also vital. You don’t need to switch providers to get a better deal, but you need someone who understands the pricing structure and can advocate for you. Offering a small discount for alternative payment (cash or debit) can encourage adoption without alienating patients.
DT: What’s your biggest piece of advice for dental practices evaluating these programs?
EC: Don’t make a decision based on a sales pitch. Ask questions. Who benefits from this program? Who assumes the risk? And what impact will this have on your patients? Ultimately, your reputation and compliance matter more than shaving a few points off your processing bill. The right strategy will protect both your bottom line and your relationships.
About Eric Cohen
Eric Cohen is the CEO and founder of Merchant Advocate, a firm that helps businesses reduce credit card processing fees without switching processors. With nearly 2 decades of experience, he’s a leading expert in uncovering hidden costs and advocating for merchant rights in a complex payments landscape.
