This commentary is by Wes Hamilton, owner of Three Penny Taproom in Montpelier.
A couple of giant credit card companies have enormous power over how businesses like Three Penny Taproom operate. They set the rules, they set the fees, and they apply them across the board. There is no negotiation and no way around it. If you want to stay open and serve your customers, you accept the cards and absorb the cost. That cost has grown into one of the most significant pressures we as small business owners face.
For us, one of those decisions has been unavoidable. We have made the call to pass credit card fees on to our customers. It is not something we wanted to do, but at a certain point, the math leaves you no other option. When the fees are this high and completely out of your control, absorbing them means cutting somewhere else that matters just as much.
That reality is part of a much bigger picture. It reflects the environment most small businesses in Vermont are operating in right now. Costs keep moving in one direction. Food, labor, insurance, utilities. None of it is static, and none of it is getting easier to manage. At the same time, there is only so much you can charge before you start losing the very people who keep your business alive. So you’re constantly threading that needle, trying to stay viable without pushing prices too high.
That’s why S.135, a bill relating to credit card fees and requiring the acceptance of cash, which is now before the Senate Committee on Finance, matters. And Washington County has a big part to play. It was introduced by one of our own legislators, Sen. Andrew Perchlik, D/P-Washington, and a similar bill introduced this year, S.316, has had support from both Sen. Perchlik and Sen. Anne Watson, D/P-Washington. Now it is another Washington County legislator, Sen. Ann Cummings, D-Washington, who, as chair of the committee, will decide whether it moves forward. That decision matters hugely to businesses like mine.
Credit card fees have become one of the most significant and least controllable costs we deal with. Nearly every transaction runs through a card now. That means every time someone walks in, sits down and pays their bill, a percentage of that total goes out the door before we ever see it. That percentage is applied to the full transaction, not just what we sell, but everything on the bill. That includes taxes we collect for the state and tips that go directly to our staff. Those dollars never stay in the business. They move through us. They are not revenue. They are obligations. But the fee still applies to them.
When you see it once, it doesn’t jump out at you. When you see it every day, on every transaction, it becomes something else entirely. Over the course of a week, a month, a year, it turns into a steady drain on the business. It shows up in decisions about whether you can hire, whether you can give someone a raise, whether you can fix something that’s been put off or whether you just have to keep holding the line.
And it’s important to be clear about where that pressure is coming from. These are not local costs. These are fees set by large, multinational credit card companies that operate far from Vermont but take a percentage out of every transaction that happens here. It’s a substantial pot of money leaving local businesses and local communities every single day.
S.135 is a focused, practical change that addresses this specific problem. It would stop credit card companies from charging percentage-based credit card fees on the tax and tip portions of a transaction. It keeps the payment system in place, with one important adjustment. Fees are applied to what a business actually earns, not to the dollars that pass through it.
We collect taxes because the law requires it. We pass tips through because they belong to the people who earned them. Those dollars are part of the transaction, but they are not part of the business’s income. S.135 brings the fee structure in line with the reality of how those transactions work. It recognizes the difference between revenue and pass-through dollars and adjusts accordingly.
The payment system already handles complexity at a level far beyond this. Every transaction already separates base price, tax and tip. Every receipt shows it. Every point-of-sale system tracks it. Applying fees to the appropriate portion of that transaction fits directly into how the system is already structured. This is about aligning what already exists with how the money actually flows.
For those of us who are still here, still operating, still rebuilding from prior challenges and trying to move forward, this kind of targeted, practical change makes a difference. It doesn’t solve every problem we face, but it addresses one that shows up every single day. That’s what makes it worth doing, and why it should move forward now.
