What Is a Service Fee and Why Do Customers Pay It?

The Short Version

When a customer buys something at a concession stand using SpiritPay, a small service fee is added on top of their purchase price. The organization keeps 100% of the listed price. The fee covers card processing and platform costs.

It works exactly like a convenience fee at a gas station, a service charge on a concert ticket, or the delivery fee on a food order. The customer pays a small amount for the convenience of using their card instead of cash.

What the Customer Actually Sees

Here’s a real example of a typical concession stand purchase:

The fee on $7.50 is $0.43 — less than the sales tax on the same purchase in most states. Customers see the fee clearly on their receipt and at checkout.

How This Compares to Other POS Systems

Most POS systems (Square, Clover, Toast) charge the organization a processing fee on every transaction. Here’s what that looks like on the same $7.50 sale:

On $25,000 in annual card sales, that’s a difference of roughly $700/year that stays in your fundraising budget instead of going to a payment company.

Do Customers Mind?

No — and here’s why. At a typical concession stand:

• The average transaction is $5–10
• The service fee on $5 is $0.30 — less than a quarter and a nickel
• The fee on $10 is $0.55
• Customers are already used to service fees on everything from concert tickets to Uber rides
• Most customers prefer paying $0.30 more over not being able to use their card at all

Think about it from the parent’s perspective: they’re standing in line with their kids, they don’t have cash, and the alternative is walking away with nothing. An extra $0.30 for a hot dog? Nobody blinks.

Is This Legal?

Yes. Credit card surcharges and service fees are legal in all 50 states as of 2024. The key requirements are:

• The fee must be clearly disclosed before the transaction
• The fee must be shown as a separate line item
• The fee must apply equally to all card types

SpiritPay handles all of this automatically — the fee is displayed on-screen during checkout and itemized on the receipt. Your organization doesn’t need to worry about compliance.

Where Does the Fee Go?

The 5% + $0.05 SpiritPay Service Fee breaks down like this:

• ~2.7% + $0.05 → Stripe (the payment processor). This covers card network fees (Visa, Mastercard, Amex), fraud prevention, and payment infrastructure.
• ~2.3% → SpiritPay (platform fee). This funds app development, support, hosting, and ongoing improvements.

The Bottom Line

The service fee model means your booster club, PTO, or community organization keeps every dollar of every sale. The customer pays a small convenience fee for using their card — the same way they pay a fee for convenience at gas stations, ticket platforms, and delivery apps.

For most organizations, this is the difference between paying $700+/year in processing fees and paying $0.