A Surcharge Program is a discount offered to certain customers who are willing to pay an annual fee in order to receive a lower monthly price for electricity. The program can be applied based on the customer or account type, or it could be available only toward the end of the summer season when air conditioning costs tend to skyrocket.
With a Surcharge Program, electricity is purchased from a supplier other than the utility company. In most cases, the surcharge supplier provides wholesale prices of electricity to program participants who pay an annual fee and in turn receive lower electric rates. The program provider may work with only one supplier or multiple suppliers.
Surcharge Program providers typically offer a year-long contract with no early termination fee. Monthly bills are typically lower than under standard retail rates, but Surcharge Program participants are also paying an annual fee, so the total cost of electricity is higher over the course of a year. Participants can switch suppliers at any time without penalty, or they can choose to stay with their supplier if they like.
Under a Surcharge Program, participants are not subject to all the same rules as standard utility company customers. For example, they might have higher daily or monthly usage limits, different meter reads schedules, different billing cycles and so on.
What is The Difference Between Surcharge Programs and Cash Discount Programs?
The main difference between a Surcharge and Cash Discount is that with the Cash Discount program consumers pay an annual fee to receive lower rates for electricity, but they do not have to shop around or switch suppliers during the year. Instead, their contract lasts as long as they want it to last and if at any point during the term of the contract they are not satisfied with their rates, they can cancel the contract. This is known as early termination and there are no fees attached.
Cash Discount participants have access to all of the same discounts their utility company offers plus any additional savings through the Cash Discount program provider. The Cash Discount provider negotiates lower prices on behalf of its customers, but those lower prices are only available through the Cash Discount program, not from the utility company.
Cash Discount participants can switch suppliers at any time without a penalty or early termination fee.
Cash Discounts and Surcharge Programs tend to be more expensive than standard service because of the annual fee charged by both types of companies. However, they generally provide better prices than standard service, especially during times of high electricity usage such as the summer.
How Do Credit Card Surcharges Benefit Your Business?
Cash Surcharge Providers offer a program to help small businesses that offer credit cards recoup their costs. Merchants pay an annual fee and receive lower rates on all purchases made with a credit card. This means you don’t have to raise prices in order to cover the cost of offering customers credit at your business.
How do I Get Started?
If you are interested in learning more about a Surcharge Program for your business, contact one of the companies listed here. They can typically give you quotes and walk you through how their program works within two to three days.