The Loyalty Loop
Are surcharges the fastest way to kill loyalty?
4-5 minute read
TLDR version: Surcharges, (especially surprise fees at checkout) may boost short-term revenue, but they erode trust and quietly destroy customer loyalty. The hidden cost?
Silent churn you can't see until it's too late.
The Surprise Tax on Trust
Ticket industries have been at the forefront of all the hate surrounding surcharges, especially when they introduced dynamic pricing in 2025 on top of the ticketing fee which we're all forced to accept. But looking at this from a customer standpoint, is it really worth it?
I struggle to think of another common business practice where it's considered acceptable to add a surprise charge to a customer for simply buying the thing they already decided to buy.
I don't pay an "entry processing fee" when I walk into a museum.
I don't get a "boarding convenience charge" when I get on a plane.
So why is it normal that a ticket listed at $49 suddenly becomes $57 at checkout?
This isn't about the amount.
It's about the moment.
There are few feelings worse in a customer relationship than the subtle sense of being tricked, especially by a brand you were excited to buy from.
You may have just had an amazing meal, attended an event you were genuinely looking forward to, or had a life-altering experience. The core experience might be excellent.
And yet, something as small as a $1–$5 surcharge can quietly cost you thousands in future revenue. You're destroying the one thing that your entire offering has just spent time and resources building: Trust.
Let's break down why.
3 Ways Surcharges Destroy Loyalty
"You get what you paid for" — except you didn't agree to this
That phrase has survived for decades because it's rooted in fairness. Customers understand that better quality often means higher prices and are willing to pay for the complete experience.
What they don't accept is post-decision pricing.
A surcharge isn't perceived as part of the value exchange. It's seen as a margin patch. A lever pulled after the customer has already committed emotionally.
From a finance perspective, it's revenue.
From a customer psychology perspective, it's a mini betrayal.
And loyalty is built (or lost) in micro moments that set your future expectations.
It's not a reward. It's a trap.
Optional extras make sense. Tips. Upgrades. Add-ons. Priority access. These are tied to additional value that is up to the customer to decide.
A surcharge isn't that.
It's positioned as unavoidable, yet rarely presented upfront in a way that lets the customer make a clean decision. The price that triggered the purchase intent is not the price they actually pay.
That creates what we call a Loyalty Leak.
Not an immediate churn event. Not a dramatic complaint. Just a tiny mental note: "That felt a bit off."
It's that bitter taste that taints what had otherwise been a great experience. Enough of those notes, and customers don't come back. They don't recommend. They don't become advocates. They become the most expensive kind of silent churn.
It's hidden in the worst possible moment
The surcharge almost always appears at checkout. The psychological finish line.
This is the moment customers expect relief, confirmation, and reward. Instead, they get friction.
And here's the key: emotionally, this reframes the entire experience.
You could deliver a brilliant event. You could serve an unforgettable meal. You could have flawless service.
But the last emotional imprint before payment is irritation.
Humans disproportionately remember the peak and the end of an experience. If the ending feels like a cash grab, that's what sticks — not the quality.
That's how great experiences still produce poor retention.
The hidden cost: churn you can't see
Surcharges rarely cause complaints (Unless you're a ticketing company). That's what makes them dangerous.
They cause:
  • Fewer repeat purchases
  • Lower referral likelihood
  • Reduced price tolerance in the future
  • Higher sensitivity to competitors
In retention terms, you're trading a tiny immediate margin gain for a long-term increase in churn probability.
It's the classic short-term optimization vs. lifetime value mistake.
You're optimizing the transaction.
But customers decide loyalty based on the relationship.
And relationships are built on fairness, clarity, and feeling respected.
It's okay to be transparent
If you need the extra $3, charge $3 more.
Bake it into the price. Be transparent. Let customers decide with clean information and no emotional ambush.
Because loyalty isn't destroyed by price.
It's destroyed by surprise cost after trust is given.
Surcharges don't just add dollars.
They subtract goodwill.
And goodwill is the compound interest of customer relationships — once you stop earning it, churn starts accruing quietly in the background.
The businesses that win long term aren't the ones who extract the most per checkout.
They're the ones customers never feel the need to escape from.
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