By Harvey Silverman, Contributor, Golf Business | Silverback Golf Marketing
I walked into a bakery while on vacation last year, an area my wife and I often visit, to grab a couple of muffins, a coffee, and a tea. I took out my debit card to pay and saw a sign on the register: “All card transactions incur a 4% transaction fee.” I politely asked for the manager and asked if she knew it is illegal to surcharge a debit card. She got defensive and said, “This is what our bank charges us. You can pay cash instead if you don’t like it.”
I pushed a little further. I told her that 4% exceeds Visa’s current 3% cap on surcharging credit cards, and that merchants are not allowed to profit on processing fees by charging more than their actual effective rate. I doubted she was really paying 4% to her processor, Stripe. She told me to take it up with her bank, so I asked if the bank also sold muffins. Snarky, I’ll admit—but my mind was already made up.
I will never go back to that bakery. And I’m not alone. Surveys consistently show that customers resent credit card surcharges and many change their behavior or stop patronizing those businesses altogether. Most golfers feel the same way: they quietly hate surcharges, a sentiment we learned in a survey leading up to the NGCOA’s 2025 Tee Time Summit.
Golf facilities facing rising costs are now being pitched two “solutions”: add a surcharge or push golfers into prepaid online tee times. Both ideas sound logical on a whiteboard. In practice, surcharging is short‑sighted for golf, and the card‑not‑present economics of prepay often make your total cost of acceptance worse, not better.
Why Surcharging Can Backfire
On paper, surcharging seems simple: pass the credit card fee to the customer, protect your margin, and move on. In reality, you:
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Damage trust with your customers.
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Remove pressure on your processor to reduce your costs.
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Take on legal and brand risk you do not need.
Golfers already feel the pinch of dynamic pricing, cart fees, and range ball prices. Add a 3% (or more) card surcharge on top, and you’ve created a new, very visible irritant at the exact moment of payment. That’s when golfers are mentally totaling up the bill and deciding how they feel about doing business with you.
Most interpret the fee as: “You want to charge me extra for paying the same way I pay everywhere else.” It feels like a penalty for normal behavior. That’s how I felt in that bakery. You’ve taken something that should be invisible plumbing—payments—and turned it into a brief argument at the counter.
Worse, surcharging doesn’t fix the underlying problem. It doesn’t reduce your underlying interchange, markups, or junk fees. It just changes who writes the check. Your rates remain bloated, but now the golfer is covering them. As those rates creep up over time, no one inside your shop feels the pain strongly enough to push back, because “the customer is paying it anyway.” That’s great for your processor. It’s not great for your business.
The compliance risk is real, too. There are rules you have to get right:
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Visa caps surcharges at the lower of your actual merchant discount rate or 3%.
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You cannot surcharge debit or prepaid cards, even if they are “run as credit.”
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Some states further restrict or cap surcharging.
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There are very strict disclosure and signage requirements.
Plenty of small businesses, and now some golf facilities, simply set a flat 3% (or more) on any card without understanding those rules. It works until a cardholder complains or a regulator notices. At that point, you’re potentially on the wrong side of both card‑brand rules and state law.
The Hidden Cost of Prepaid Tee Times
The second trend is the push toward fully prepaid tee times. The sales pitch is familiar: no‑shows are killing you, prepay locks in revenue, and your tee sheet becomes more predictable.
There is some truth here. No‑shows are a genuine problem, and asking for a card to guarantee a tee time can help. But turning your entire tee sheet into prepay e‑commerce has a cost structure that’s often ignored.
When you move to prepay online, you shift from “card‑present” to “card‑not‑present” (CNP) transactions. CNP transactions carry higher interchange and risk fees because the card and cardholder are not physically present, so fraud risk is higher. Industry comparisons show that CNP rates are typically higher than card‑present rates, before your processor’s markups and any gateway fees are added.
On a golf P&L, that gap adds up when most green fees, carts, and range charges now run through an online engine instead of the pro shop terminal. Many systems also route those prepaid payments through third‑party gateways or “integrated payments” partners, who each take their cut. What looks like a simple convenience feature for golfers often results in a higher effective cost per dollar collected for you.
A practical rule of thumb: ‘card-not-present’ transactions typically cost about 0.5-1.0 percentage points more than comparable card-present transactions, plus slightly higher per-transaction fees.
Meanwhile, you may still not have solved your real problem. Blanket prepay eliminates unpaid no‑shows, but it creates new types of friction: fights over cancellation windows, refund policies, weather exceptions, and “I meant to move my time, not lose my money” conversations. You’ve traded one set of customer issues for another—and paid more for the privilege.
A more targeted approach usually works better: require a card on file to hold the booking, charge at check‑in, or only when a no‑show or late cancellation actually occurs, and enforce the policy consistently. That keeps most transactions in the cheaper card‑present category while still giving you leverage over the small percentage of players who abuse the system. However, if no-shows, short-shows, and late cancellations have become a major economic headache, then the math of higher card transaction fees might work in your favor. It’s not hard math, but math you must do before changing your tee time business structure to prepaid.
When Surcharging Meets Prepay
The real trouble begins when these two ideas—surcharging and prepay—get bundled together. Some facilities are now being sold a package that looks like this:
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Move most or all of your volume to prepaid online tee times (card‑not‑present).
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Add a surcharge to those online payments to cover the higher costs.
From a processor’s point of view, this is brilliant. From a golf operator’s point of view, it’s a slow erosion of both margin and goodwill.
You’ve pushed more revenue into a higher‑cost transaction category. Then you’ve trained your customers to expect an extra fee every time they book, which encourages them to resent your pricing or look elsewhere. And because “the golfer is paying for it,” your team has less motivation than ever to scrutinize your rates or push back on increases.
You’re carrying the reputational and compliance risk. Your payment partners are sharing in the upside.
A Better Playbook for Golf Operators
If surcharging and blanket prepay are the wrong tools, what should golf facilities do instead?
First, clean up your processing before you even think about charging your golfers more. Audit your statements for inflated markups and junk fees. Calculate your true blended effective rate, not just the headline rate you were quoted. Eliminate unnecessary gateways or middlemen where possible. A disciplined review of your processing relationship usually yields longer‑term savings than a 3% surcharge ever will.
Second, use guarantees rather than universal prepay to manage no‑shows. Require a card to book. Set a clear cancellation window and spell it out on your website and confirmation emails. Charge only when someone actually no‑shows or cancels late, and then enforce that policy consistently. You keep most volume in lower‑cost, card‑present transactions but still protect your tee sheet.
Third, if you ever do adopt fees, make them rare, transparent, and genuinely defensible from the golfer’s perspective. Never surcharge debit or prepaid cards. Never exceed your actual cost or card‑brand caps. Treat any fee as a temporary lever, not a permanent excuse for ignoring your underlying processing costs.
A simple gut check helps: “If I were the golfer, would this feel fair—or like the bakery sign?” If it feels like the bakery sign, don’t do it.
Golf is a relationship business. You’re asking people to give you four hours of their time, organize friends, and often drive past other courses to reach yours. Surcharging and blanket prepay may look like clever financial moves, but they mostly pass costs and some frustration to the very people you can least afford to lose.
For more about why surcharges are a bad idea, check out this article. For help understanding and negotiating lower transaction-fee rates, you can contact Kevin McDonnell at Claymore Payments, who was a speaker at NGCOA’s Golf Business Conference 2024, at kmac@claymorepayments.com.