The short version: Most vendors never make this decision; they inherit whatever the platform defaults to. Hotplate adds its fee to the customer's total by default. Cheddar Up lets you configure it. Almost everything else deducts from you and gives you no choice at all. So the first question is not "should I pass it on" but "can I?" If you can, the answer depends on one thing: whether your buyer is choosing you or comparing you. A committed customer accepts a fee line without much thought. Someone weighing you against a stall down the road does not, and the fee has just made that comparison for them.
Shorter list than you would expect, and worth establishing before anything else.
Passes to the customer by default: Hotplate, which adds 5% plus 55¢ to the buyer's total.
Lets you configure it: Cheddar Up, which explicitly supports customising who pays fees.
Deducts from you, no option: Square, Shopify, Squarespace, Wix, Big Cartel, Bake.Shop, Bakesy's optional payments, Etsy, and most of the category.
That third group is the majority, which means for most vendors this article is about a decision they cannot make. If that is you, skip to the section on what to do instead, because raising prices achieves the same thing by a different route.
Enough to be deliberate about, and it scales with volume.
At $1,000 a month across 40 orders of $25, a 5%-plus-55¢ fee is $72 a month, or $864 a year.
At $2,000 a month, it is $1,728 a year.
At $4,000 a month, it is $3,456.
So this single setting is worth somewhere between eight hundred and three thousand five hundred dollars a year for a typical small food business. That is more than most platform-choice decisions and it takes one click.
Not "who should bear the cost" but "what does the fee do to the buying decision?"
The money is the same either way; it is coming out of the transaction regardless. What changes is where the customer sees it, and whether seeing it changes their behaviour.
Which reduces to one question: is this customer choosing you, or comparing you?
Choosing you means they came for your bread specifically, they know your name, and the alternative is not buying rather than buying elsewhere. A fee line is mildly annoying and does not change the outcome.
Comparing you means your price sits next to something else, including your own market stall where the same loaf costs $6 flat and there is no checkout at all. Here the fee is not a cost, it is a reason.
Almost everything else in this decision follows from that.
Five situations, and they share a common shape.
Scheduled releases with a committed audience. Someone who set an alarm for a drop is not price-shopping. This is why Hotplate's default makes sense for the businesses it serves.
Genuinely scarce products. If there are forty and they go, the fee is not the binding consideration.
Group collections and fundraisers. Everyone is paying a known amount toward a shared purpose, and a processing line is expected rather than surprising.
Wholesale and institutional buyers. They see fees on invoices constantly and will not think about it.
Large baskets. On a $100 order, 5% plus 55¢ is 5.55%. Noticeable, and proportionally smaller than on a $20 one.
Four situations, and they are the more common ones for everyday food selling.
Your price is directly comparable. A $6 loaf that becomes $6.85 at checkout invites the comparison you did not want.
Repeat customers, small baskets. Someone ordering weekly sees the fee fifty-two times a year. Repetition makes small friction visible in a way a single transaction does not.
You are building the ordering habit. If you are trying to move customers from messaging you to a storefront, adding a fee at the moment you are asking them to change is working against yourself.
The fee is a large share of the total. At a $10 order, 5% plus 55¢ is 10.5%. That is a hard thing to present well.
That last point is the arithmetic argument, and it is why basket size matters more here than any other variable.
The presentation matters nearly as much as the decision.
Do:
Do not:
The general rule is the same one that applies to any price: surprises cost more than amounts. A fee shown early and named clearly is a cost. The same fee appearing at checkout is a reason to abandon the order.
Two releases, and compare the right number.
Step three is where people go wrong. A pass-through version converting 8% worse can still leave you better off, because you kept $1.80 on every order that did complete.
Worked at 40 orders a month with a $25 basket:
Almost identical, which is exactly why this needs measuring rather than intuition. At a 4% drop, passing on wins clearly. At 12%, absorbing does.
Most do not, and the answer is to achieve the same thing through pricing.
If a platform deducts 5% plus 55¢ from you and offers no pass-through setting, you can simply price it in. A $25 item becomes $27, which restores your position and is invisible in a way a checkout line is not.
That is arguably the better approach anyway:
The objection is that it makes you look more expensive on the shelf. Fair, and worth weighing against the fact that a fee at checkout makes you look more expensive at the exact moment someone is deciding.
There is a practical wrinkle worth planning for: your prices should probably match across channels. If a loaf is $27 online and $25 at the stall, someone will notice, and explaining that the difference is a platform fee is a conversation you do not want to have while serving a queue. Either price both at $27, or be ready with a one-sentence answer about why collection at the market costs less.
Both are defensible. The version that fails is having two prices and no explanation, because it reads as arbitrary rather than considered.
Worth thinking about literally, since this is the thing you are deciding.
A customer ordering $25 of bread on a platform passing on 5% plus 55¢ sees a total of $26.80. Whether that lands as reasonable depends almost entirely on context they bring with them:
That fourth point is the one vendors underweight. Customers who order food online regularly are used to service fees, and a single clearly-named line is far less than most delivery apps add. The comparison in their head may not be your market stall; it may be the last thing they ordered through an app.
Which is another argument for testing rather than assuming. Your read on your own customers is a hypothesis, and two releases will tell you more than any amount of reasoning about it. If you want a third data point, running the same orders through a storefront with no platform fee at all shows you what the decision is actually worth in your own numbers.
Our guides to communicating a price increase to regular customers and announcing a price increase in DMs cover doing that without losing anyone, and our piece on why charging what you are worth feels wrong covers the part that is actually difficult.
Worth being aware of rather than alarmed by, and worth checking locally.
Surcharging and fee disclosure are areas with real rules attached, and they vary by state and by card network. The general principles that apply almost everywhere:
The FTC's guidance on advertising and marketing for businesses covers the general expectation that pricing is presented honestly, and your state's consumer protection office is the authority on anything more specific.
The practical version for a small food vendor: if the fee is visible, named, and shown before the final step, you are doing the thing the rules are about. Most problems in this area come from concealment rather than from the charge itself.
Four steps, in order.
Step three is the one most vendors skip. A fee you cannot pass on is still a cost, and costs belong in prices. Absorbing 5% plus 55¢ without adjusting anything is a decision to earn less, made by default rather than on purpose.
Our guide to profit margin benchmarks for food products covers where your margin should sit once fees are accounted for, and the SBA's guidance on managing your finances is a reasonable framework for tracking what this is costing you.
If you would rather not have the decision at all, Homegrown is $10 a month billed annually with 0% commission and 2.9% plus $0.30 processing published up front, so there is no platform fee to pass on or absorb. It handles pickup at each place you sell with its own schedule and cutoff, local delivery with a radius and a route, and sales tax calculated, filed, and remitted in all 50 states. The honest bounds: there is no fee-passing configuration, and no drop windows, no point-of-sale, and no national shipping. If your business runs on timed releases with a committed audience, Hotplate's pass-through default is genuinely well-suited to that and this is not. You can run one release through a trial and see what your costs look like without a percentage on top.
Every platform below shows the same four commercial facts, because a table that lists one platform's transaction fee and not another's is not a comparison. "Not published" means exactly that: the company does not state it publicly.
| Platform | Who the fee lands on by default | Subscription (annual) | Free trial | Platform fee | Card processing |
|---|---|---|---|---|---|
| Hotplate | The customer, by default, about $1.55 on a $20 order | $0 | n/a | 5% + $0.55 platform fee, added to the customer | 2.9% + $0.30 processing (vendor) |
| Homegrown | You, and there is no option to pass it on | $10/mo billed annually | 7-day free trial | $0 platform fee (0% commission) | 2.9% + $0.30 processing |
| Etsy | You, absorbed into your margin | No subscription | n/a | $0.20 listing + 6.5% commission | 3.0% + $0.25 processing |
| Cheddar Up | Either, you choose who carries it | Basic $0; Pro $15/mo annual | No trial needed, Basic is free | $0 platform fee | 3.95% + $0.95 Basic, 3.59% + $0.59 Pro processing |
| Square Online | You | Free tier; paid from $29/mo per location | 30-day trial on paid plans | $0 platform fee | 3.3% + $0.30 free tier, 2.9% + $0.30 paid |
| LocallyGrown | You, once you pass $15,000 | $0 | n/a, free to start | 3% commission after the first $15,000 | 2.9% + $0.30 processing, your own Stripe |
Only if your platform supports it. Hotplate adds its fee to the customer's total by default and Cheddar Up lets you configure it. Most platforms deduct from you with no option.
At $1,000 a month it is $864 a year, at $2,000 a month it is $1,728, and at $4,000 a month it is $3,456. That is more than most platform-choice decisions and it takes one setting.
When your customer is choosing you rather than comparing you: scheduled releases with a committed audience, genuinely scarce products, group collections, wholesale buyers, or large baskets.
When your price sits directly against alternatives, when the same customers order weekly and see the fee repeatedly, when you are still building the ordering habit, or when baskets are small enough that the fee is a large share.
Run two comparable releases, one each way, and compare net revenue rather than conversion. A pass-through version converting 8% worse can still leave you better off, because you kept the fee on every order that completed.
Price it in. A $25 item becomes $27, which restores your position with one number instead of a total plus a fee, and avoids any checkout surprise.
Disclosure rules apply and some states restrict card surcharges specifically. The practical standard is to name the fee clearly and show it before the final step, since most problems come from concealment rather than the charge.
First establish whether you even have the choice. Most platforms deduct from you and offer no setting, so for the majority of vendors this is a pricing question rather than a configuration one.
If you do have the choice, use one test: is this customer choosing you, or comparing you? Committed buyers accept a fee line without much thought. Someone weighing you against the stall down the road does not, and at a $10 basket a 5%-plus-55¢ fee is 10.5%, which is a hard thing to present well.
And if you have no choice, do not absorb it silently. Price it in. A fee you cannot pass on is still a cost, and a cost that never reaches your prices is just a decision to earn less, made by default rather than on purpose.
