The verdict in three sentences
Passing fees to the customer (surcharging) protects your margin but drops conversion by 4 to 9 % the moment the amount becomes visible at checkout. Absorbing them protects conversion but eats 1,5 to 4 % of margin on every sale. The 2026 rule: absorb on small baskets (where abandonment is costly) and partially pass through on large baskets or B2B.
The three possible strategies
Each strategy pulls margin and conversion in opposite directions.
| Strategy | Margin effect | Conversion effect |
|---|---|---|
| Fully absorb fees | -1,5 to -4 % | Neutral (baseline) |
| Fully pass through (visible surcharge) | +1,5 to +4 % | -4 to -9 % |
| Fees baked into displayed price | Neutral | Neutral to slightly positive |
| Capped convenience fee (~1,5 %) | +1,0 to +1,5 % | -1 to -3 % |
The most profitable strategy is often to bake fees into the displayed price: the customer sees no extra line, and margin is protected from the moment you set the price.
Legality and perception by country
Surcharging is neither perceived nor regulated the same way everywhere.
| Market | Visible surcharge tolerated? | Customer perception |
|---|---|---|
| Nigeria | Yes, very common | Expected on cards |
| Kenya | Yes, but till fee often absorbed | Sensitive on M-Pesa |
| Senegal / WAEMU | Yes, common practice | Accepted if modest |
| International (diaspora) | Regulated | Poorly received |
A displayed convenience fee capped around 1,5 % is generally well accepted; beyond that, perception shifts toward feeling penalized.
Mini case study
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Tunde runs an online appliance store in Lagos, average basket 80 000 NGN, 300 sales/month. Absorbing 3 % of fees, he loses 720 000 NGN/month of margin. By baking fees into the displayed price (a discreet 3 % rise) with no surcharge line, he keeps his margin and loses only ~1 % of conversion, about 3 sales. Net: he recovers most of the 720 000 NGN while protecting his conversion rate.
FAQ
Does passing fees on really scare customers away?
Yes, when the amount appears as a separate line at checkout: conversion drops 4 to 9 %. Baking fees into the displayed price cancels that effect.
Is a convenience fee accepted?
Up to about 1,5 % it is generally tolerated, especially on cards. Beyond that, perception degrades and cart abandonment rises.
Should I absorb on small baskets?
Yes. On a 2 000 NGN basket, abandonment costs more than the absorbed fee. Passing through only makes sense on high tickets.
Is surcharging legal in Kenya?
It is tolerated, but M-Pesa till fees are often absorbed and customers are sensitive to it. For diaspora and international, bake it into the price.
Let's talk about your project. We model the margin/conversion impact of each strategy on your real catalog before you decide. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
