When "just absorb it" doesn't work: card fees for high-ticket, thin-margin businesses

Most surcharge-ban advice assumes you can absorb the cost or quietly build it into your prices. For a cafe adding 30 cents to a coffee, that's true. But for businesses selling big-ticket items on thin margins — travel, jewellery, furniture, large trade invoices, events — the maths can break down completely. On a high-value credit-card sale, the acceptance fee can be larger than the profit on the sale itself. This guide is about what to do when absorbing the fee isn't a rounding error, but the difference between a sale and a loss.

The problem, in one number

Card acceptance costs are charged as a percentage of the transaction. Your margin is not. When those two percentages cross, every card sale loses money.

Take a travel agent. Airline commissions on airfares commonly run between 0 and 1 per cent of the fare. Now put an $8,000 international airfare on a customer's credit card at a typical card acceptance cost of ~1.5%:

• Card acceptance cost: ~$120
• Commission earned: $0–$80

The agent has just paid up to $120 for the privilege of making a sale worth $80 to them. Before 1 October they could add a surcharge and pass that $120 to the customer. After 1 October, on eftpos, Mastercard and Visa, they can't. Absorbing it turns the transaction into a guaranteed loss.

This isn't hypothetical. In late July 2026, travel agents told the Sydney Morning Herald they were considering refusing credit cards altogether, with one agency head estimating the cost of absorbing card fees at roughly a travel agent's entire annual salary (reporting by Elias Visontay, SMH, 26 July 2026).

Who this affects

Any business where the ticket is large and the margin is thin:

• Travel agents and tour operators — high fares, sub-1% commissions.
• Jewellers — $5,000 rings on retail margins already squeezed by online competition.
• Furniture and appliance retailers — big-ticket sales, tight markups.
• Trades and builders invoicing large material-heavy jobs — a $30,000 invoice at 1.5% is $450 of card cost against a margin that's mostly labour.
• Event, ticketing and hospitality-function businesses — large deposits and final payments on slim event margins.

If your average transaction is high and your net margin is in single digits, the standard "absorb or reprice" advice doesn't fit you. Repricing a coffee by 2% is invisible; repricing an $8,000 airfare by 2% is a $160 sticker-shock that loses you the booking to a competitor.

The levers that actually work

You have more options than "absorb it" or "lose the sale." In rough order of who should reach for them first:

1. Least-cost routing (check this today)

When a customer taps a debit card, it can travel over eftpos (usually cheaper) or Visa/Mastercard (usually dearer). Least-cost routing sends it via the cheaper network automatically. Many merchants have it switched off without knowing. For a debit-heavy business this alone can cut acceptance costs meaningfully, with zero customer-facing change. Ask your provider whether it's enabled — and if you don't have it, that's a reason to compare providers who offer it well.

2. Steer to lower-cost payment methods

You cannot surcharge eftpos, Mastercard or Visa. You can offer — and gently encourage — genuinely cheaper methods:

• eftpos/debit carries lower wholesale costs than premium credit, and the October interchange cuts widen that gap.
• Account-to-account transfer (PayID/bank transfer) carries no card acceptance cost at all. For high-value, less time-sensitive payments (a furniture order, a tour deposit), offering bank transfer as the default and card as the fallback is entirely legal and can save the whole fee. The trade-off is settlement speed and convenience — spell it out to the customer honestly.

3. Don't count on surcharging — it's ending across the board

The ban covers eftpos, Mastercard and Visa, and American Express has confirmed it will follow the same rule from 1 October 2026 — so there is no longer a major card network you can compliantly surcharge. Switch surcharging off on every device and treat acceptance as a cost to manage through the other levers here, not one to pass on.

4. Re-examine your pricing model — the October reform changes the answer

This is the lever most high-ticket merchants miss. If your sales are credit-heavy and high-value, a flat rate may now be the wrong structure. Under a flat rate, your provider keeps the benefit of October's interchange cap cut; under interchange-plus (cost-plus) pricing, that wholesale reduction flows through to you. For a business processing large credit-card transactions, the difference between a flat 1.5% and a cost-plus structure can be material — and the reform has just tilted the maths further toward cost-plus. This is exactly what a proper comparison at your real card mix will show.

5. Reprice deliberately, not reflexively

If some cost genuinely has to move into prices, do it with intent: spread across a range rather than loaded onto card payers, and never disguised as a "service fee" that only card users somehow trigger — a disguised surcharge is still a surcharge. For thin-margin, high-ticket businesses, a small, transparent booking or service fee that applies to everyone regardless of payment method is lawful; a fee that tracks card use is not.

An honest limit

Cheaper acceptance narrows the gap; it does not always erase it. On a genuinely loss-making transaction — sub-1% commission against a credit-card fee — no provider switch alone turns it profitable. What the levers above do is give you a combination: route debit cheaply, steer high-value payments to account-to-account, and make sure you're not on a pricing model that pockets the October savings. Stacked together, those can move a loss-making card mix back into the black. Modelling your specific numbers is the only way to know which combination gets you there.

Work out your own numbers

Every business above has different maths. The question is always the same: at your average ticket, your card mix and your margin, what does card acceptance actually cost you — and which pricing model and payment-method mix minimises it?

See what you'd really pay — compare the major providers we track by card processing costs at your actual turnover and card mix. Compare now →

Selling online too? Compare online payment gateways in the same place — card-not-present rates differ, and they matter most on high-ticket sales. Compare gateways →

The travel-agent figures and the $660m interchange-revenue estimate referenced here were reported by the Sydney Morning Herald (Elias Visontay, 26 July 2026); Compayr's analysis of the merchant options is our own. Provider rates on Compayr are indicative, last verified as shown on each listing — always confirm directly with the provider. This article is general information, not financial advice.