Ever notice how more and more businesses are tacking on a 3% credit card surcharge? (hidden costs)

I hate it. It feels cheap and petty. And if you’ve ever felt that way, you aren’t alone.

But if you’re charging it?
You’re paying attention to the wrong numbers. We need to talk.

Because if you’re paying this much attention to the wrong numbers, I wonder what else is being missed.

Let me pull back the curtain for a second:
Typical card processing fees range from 1.5% to 3.5%. If the business is generating any volume, it’s on the low end.

That means the standard 3% surcharge isn’t just covering costs. It’s also generating revenue.

But let’s say the business actually does pay a 3% fee. If they’re worried about that and trying to encourage more cash payment, here’s a shocker:

That 3% fee represents a savings to the business. Processing checks and cash is more expensive.

It’s just that those costs aren’t visible in their P&L. So, they don’t see them—and don’t care. (hidden costs)

But they should. Because here’s what they aren’t seeing:

According to Commerce Bank, both checks and cash tend to cost more:

• Checks: Once you’ve factored in processing time/labor, errors, bank fees, fraud, bad checks, and so on, the average business will pay between $10 and sometimes up to $20 to process each check. (hidden costs)
• Cash: Labor (counting tills, finding change), shrinkage, theft, and deposit fees add 4% to 15%.

There is a cost to all businesses. These retail businesses trying to reclaim a 3% fee are disincentivizing the most efficient way to process payment.

Most retail businesses should be encouraging credit card use—not discouraging it. It’s cheaper, less susceptible to theft or fraud, and takes less staff time to manage.

But whether or not you agree with surcharging, that’s not the real point here. The 3% fee is just one visible example.
The real message is this: Most leaders focus on the costs they can see, even though it’s the invisible ones that tend to do the most damage.

Making the invisible, visible: What else are we missing? (hidden costs)

I use credit card fees to illustrate a deeper problem of paying attention to the wrong things.

Here are eight other areas in your business where you may be hemorrhaging money. (hidden costs)

The good news? These are within your control.
With the right interventions, most of these can be turned around within months.

Turnover is a tax you’re already paying.
Losing a solid employee? Replacing them will likely cost at least 20% of their salary.
Are they highly skilled? Those replacement costs can range from 75% to 200%.
That’s not opinion—Wharton and the Center for American Progress back it.

No one will stay forever. However, if you’re losing people at a rate faster than industry norms, you’re wasting money. (hidden costs)

Conflict is draining your payroll.
The average employee spends nearly 3 hours a week dealing with workplace tension.
Management spends, on average, 8 hours a week. Multiply that by everyone’s salary.

If that isn’t eye-popping enough, consider lost opportunities, delays, increased workers’ comp claims, increased complaints, and lawsuits. These are all directly related to conflict in the workplace.

You don’t see that on a spreadsheet. But conflict is real, common, and expensive.

Broken processes bleed time.
Inefficient systems cost businesses up to 30% of their revenue.
Not profits. Revenue. You don’t notice it—because it’s scattered across emails, delays, rework, and missed handoffs. (hidden costs)

Role confusion kills momentum.
When people are unclear about who owns what, projects stall, errors increase, and accountability disappears.

You don’t need better software or any more off-sites. You just need clarity.

Fragmentation makes your team stupid.
Multitasking has been shown to produce effects equivalent to those of being buzzed. Frequent switching between tools, systems, and priorities is costly. Most workers lose up to 20 hours a week to fragmentation and interruptions.

That’s half a week, gone. Every week. (hidden costs)

Meetings are your most expensive hobby.
Meetings are important. However, unproductive meetings cost U.S. companies between $200 billion and $280 billion annually.

Make sure your meetings have clear goals, are as effective as possible, and are as short as possible.

Poor accountability guarantees missed targets.
An owner recently told me that strategic planning doesn’t work. The truth is, he didn’t have a planning or strategy problem. He had a follow-through problem.

Goals weren’t clear. Deadlines weren’t clear. Responsibility wasn’t clear. (hidden costs)

Nothing was clear so nothing got done.

Burnout is quiet but costly.
Fatigued or disengaged people don’t perform. They quit. Sometimes without leaving the job.

Some estimates say, burnout can cost you $4,000 to $20,000 per person, per year. This shows up in lost time, lower-quality work, and increased sick days, among others.

You’ll never see the invoice—but you’ll feel it.

What this looks like in a $10M company

Extrapolating from above, here’s how this plays out in a normal small business.
Even improvements in conservative estimates show a massive benefit.

Of course, your numbers and trouble spots may look different. These examples below aren’t a prediction, just an illustration of how silent costs can accumulate well beyond the visible fees you see each month. (hidden costs)

Sources: Wharton, Center for American Progress, SHRM, ScienceDirect, Harvard Business Review, IDC, Quickbase, Commerce Bank, PlainsCapital Bank, Fellow.

Most companies aren’t likely to see all of these costs fully expressed, all at the same time. (Athough some come close. Those don’t last long without quick course corrections.)

The point is, there is enormous ‘opportunity’ for internal leakage. Which means enormous opportunity to drive profit and value back into your company. (hidden costs)

That being said, you may or may not agree with these numbers. That’s fine. And you are unlikely to be leaking in every category all at once. However, in my experience, we can usually reclaim 10%-20% without a significant amount of effort.

Just remember…
None of these costs has codes. They aren’t showing up on your P&Ls. But that doesn’t mean they don’t exist.

Addressing them, unlike most cost-cutting measures, has the benefit of making people happier and more productive.

It’s an easy win-win.

If you really want to add dollars to your bottom line, don’t do silly things like a 3% surcharge.

Fix the leaks. The silent and real ones.

Take good care,

Christian