COVID-19 has pinched small businesses in a staggering number of ways.
As the owner of a retail store, you may feel like all of these stings are just something that you have to endure. But one way that you can (and should) defer some of the costs of COVID-19 is by instituting a COVID-19 safety fee.
In this article, we’ll look at how—and why—you can implement a COVID-19 safety fee without alienating your customers.
Why should you implement a COVID-19 safety fee?
Small businesses in 2020 and beyond need to invest in keeping their customers and workers safe while also managing expenses. Passing some of those safety-related costs onto the customer is a reasonable approach, and our research shows that consumers agree.
This summer, we ran a survey of more than 550 consumers and found that 59% of respondents would accept a small COVID-19 fee on purchases if it meant the store used that money to help ensure public health during COVID-19. (Click here to see our methodology)
Of those who said they would accept the fee, 73% said they would only accept the fee if they were informed of what the fee covers.
Wondering where your peers stand on COVID-19 surcharges? Our June survey of more than 550 small business leaders found that 71% had either already added (46%) or were planning to add (25%) a COVID-19 surcharge.
Our consumer impact survey also asked consumers which safety measures were most important to them for retailers to adopt. Things like hand sanitizer and disinfectant wipes, face masks, and social distancing/occupancy limits topped the list, and you can use this information to determine what to focus on and what to factor into your COVID-19 safety fee.
It’s also notable that more consumers (29%) would prefer that stores didn’t take the temperature of all employees and customers before entering than those who wanted such a precaution (27%).
The CDC recommends that stores and other businesses ensure the following before reopening to customers:
- Social distancing of six feet from others in shared spaces
- Frequent hand washing or hand sanitizer use when hand washing isn’t possible
- Wearing face masks
- Avoiding touching the face
- Staying home when sick or showing symptoms
- Cleaning and disinfecting frequently touched objects and surfaces
- Plexiglass barriers in areas where social distancing isn’t possible (such as transaction areas)
- Daily health checks for workers
This means that both the CDC guidelines and the majority of consumers are in alignment on hand sanitizer and additional hand washing soap, face coverings, and disinfectant. Including these expenses in your COVID-19 safety fee is perfectly reasonable and defensible.
As more and more people get used to the idea of wearing masks in public places, you shouldn’t be expected to provide personal protective equipment for your customers. But it’s a good idea to have extra masks on hand to avoid uncomfortable situations with customers who don’t have one. Charge a nominal fee, like .50 cents or $1 per mask, rather than factoring this into the COVID-19 safety fee so that you’re not penalizing your customers who came prepared.
COVID-19 safety fee do’s and don’ts
Just because you can implement a COVID-19 fee doesn’t mean you should take advantage of the situation just to charge more. Here’s a quick overview of the Do’s and Don’ts to follow to make sure you’re not viewed as opportunistic or engaging in price gouging.
Let’s take a closer look at what to do and what not to do when it comes to your COVID-19 safety fee:
What to do:
DO post clear information explaining what the COVID-19 fee is for and how it is helping to make your customers and employees safer.
DO calculate your COVID-19 fee using real expenses (we’ll go over this in the section below), rather than guesstimating a number.
DO consider all factors when deciding whether or not to implement a COVID-19 safety fee. For example, if your store is spending an extra $20 per month on hand sanitizer and face masks for workers, and you sell essential items in a low-income community, do you really need to pass those modest costs onto your already pinched customers? On the other hand, if you’re spending hundreds of dollars more per month, the surcharge may be necessary.
What not to do:
DON’T include general upgrades to your store as part of the COVID-19 safety fee calculation. For example, if you install a brand new contactless payment system or air conditioning unit that you plan to use for the next 5-10 years, don’t include that in the COVID-19 surcharge. (Do remember to include it in your tax return, though.)
DON’T make your COVID-19 safety fee permanent. If and when the time comes that you no longer need to purchase extra hand sanitizer, disinfectant, and PPE, remove or reduce the COVID-19 surcharge.
DON’T wrap the economic downturn into your COVID-19 safety fee, which should be used to offset the cost of specific safety expenses only. You may need to raise your prices or cut costs elsewhere to stay afloat, but that should be separated from a safety fee.
How do you calculate your COVID-19 safety fee?
There’s no way to apply a flat number or percentage that will cover every business’ unique situation. But here’s one fair and simple approach to calculating your COVID-19 safety fee:
As you see, you can total up all of your monthly safety and cleaning expenses due to the coronavirus pandemic (masks for employees, hand sanitizer, hand soap, disinfectant NOT including your normal, pre-COVID-19 supply), then divide that total by your average number of monthly customers.
So, for example, if you are spending an additional $125 per month on cleaning and safety supplies, and you average 500 customers per month, you can add a $0.25 COVID-19 safety fee to each purchase.
You can also include one-time upgrades, such as plexiglass barriers or digital thermometers, in your COVID-19 safety fee, but you should reduce the fee once the cost of that item has been recuperated.
Modern POS technology can make your business safer
One way to make your business safer and more efficient while coronavirus is an issue is by implementing an up-to-date point of sale system that allows you to scan purchases and process payments contact-free.
Software Advice advisors can help you find the perfect point of sale solution to make your business safer. Click here to get started on setting up a free, 15-minute consultation.
The Software Advice COVID-19 Consumer & Employee Impact Survey was conducted in June 2020 to understand how the priorities and preferences of people—as consumers, employees, and patients—have shifted due to COVID-19. We surveyed 564 consumers making up a representative sample (by age and gender) of the U.S. population.
The Business Model Survey was conducted in June 2020 to better understand the business model changes SMBs have made in recent months, how these changes have impacted their value propositions, and the resulting challenges and successes. We surveyed 577 self-identified SMB leaders at U.S. businesses.
We worded the questions to ensure that each respondent fully understood the meaning and the topic at hand.