Percentage of sale.... HELP!!!!!?
I just started accepting credit cards as a form of payment. The program that allows me to do this charges me a fee of 2.75% per transaction. I cannot afford to lose that 2.75%, so I inform my customers that if they want to pay with a card, there will be a processing/service fee added to their original price. The problem that I am having is I only want to charge the customer the extra that the card payment company is taking out, and I cannot get my math to add up!
This is what I tried:
Mr. Jones owes me $5,000.00.
I multiplied 5000 (amount owed) by 1.0275 (2.75% charge), which gave me a total of: $5,137.50
So I was going to charge Mr. Jones $5,137.50. This way I would get my $5,000.00, and the processing company would get their 2.75%.
HOWEVER..... I realized that now the processing company is going to take 2.75% out of the $5,137.50 that I enter, which leaves me with $4,996.22. I realize that this is not a huge loss, but I have clients with bills up to $100,000, and I do not want to keep eating away at my profit. I also don't want to charge my clients anything more than the processing company is taking out.
SO my question is:
Without having to do trial-and-error, what kind of an equation can I use to figure out how to charge my clients without cutting into the initial price that I should receive?