So, What Exactly is a Surcharge Anyway? (The Secret Behind Hidden Fees)

A surcharge is often defined as a “service fee” or “shipping and handling fee.” But what does that really mean?

A surcharge is typically an extra charge added on to the stated price of goods or services, added to an existing tax or added as a stand-alone charge. Sometimes, surcharges are added on as temporary measures to defray the costs of increased commodity pricing (e.g., fuel surcharge), or they are used as regular and permanent fees.

Every day, these types of charges are added on when you use the ATM machine, purchase an airline ticket, purchase something online and/or need something shipped.

When it comes to ecommerce shipping costs, there are several factors that determine what surcharges may be added by the carrier:

• Service to remote and extended areas
• International shipping
• Ground and air fuel
• Bulky, heavy, oversized or fragile items
• Weekend deliveries

Generally, private carriers such as UPS and FedEx have surcharges that are set rates or adjusted on a monthly basis. These charges can range from handling to delivery areas to fuel fees. The U.S. Postal Service, on the other hand, does not charge a single cent more for fuel, residential or Saturday delivery surcharges for its deliveries (aka no hidden fees!).

If you do choose to use a private carrier like UPS or FedEx, it’s important to do your research beforehand, so you know what kinds of shipping surcharges might be added on due to size, weight or special handling required for certain items. That way, you can be upfront with your customers about how these surcharges will impact their shipping costs.

Remember — this is not the time to be vague or mysterious (oftentimes, online shoppers complain that it’s nearly impossible to find out what they’re actually being charged for).

As an online retailer, it’s your responsibility to be transparent with your customers and prominently display surcharges for specific products on your product pages. With such transparency, your customers won’t be surprised about the additional fees when they go to checkout.

About Endicia

Endicia is a leading provider of internet-based postage services that make it easier and more affordable to ship parcels through the U.S. Postal Service®. We know that shipping can be complex and our goal is to simplify your shipping operations so you can focus on doing what you do best. Visit us at www.endicia.com to learn more.