Earlier this year, Greg Shugar, owner of Beau Ties of Vermont, was deep into tariff strategizing when he had a thought: What if he added a small tariff charge to his products, kind of like sales tax? He floated the idea on LinkedIn. 

“You wouldn’t believe the political backlash that there was,” Shugar said. “It just seems to trigger people’s minds in a political way.”

The post got more than 600 comments, many of which were fraught enough for Shugar to abandon the idea. Instead, he raised prices and cut staff.

“I let go of a customer service rep. I moved two of my production staff members from full-time to part-time,” said Shugar. “I cut things that I really wanted to keep; that’s why I was paying for them in the first place. But these are the decisions we needed to make.”

Businesses are at a real turning point with tariffs. Inventory they’ve stocked up on is running out, and they can no longer afford to eat the cost of the import taxes — and are instead passing it on to consumers. Inklings of that became evident in July’s consumer and producer price indexes and, based on what companies are saying in earnings calls, more price hikes are coming soon.

The thing is, for businesses, increasing prices is usually a last resort. They’d rather streamline supply chains, automate, or even sell lower-quality stuff. And companies have to be smarter than ever about pricing, so they’re increasingly finding creative ways to do it.

“The thing that doesn’t work is just a flat, sweeping price hike across everything,” said Marty Anderson, a principal at The Parker Avery Group, a consulting firm that’s worked with ALDI, PetSmart, and Lululemon.

Consumers are more sensitive and suspicious of corporate greed, especially after years of inflation. So companies are looking for targeted ways to raise prices that can sometimes seem sneaky. They might cut free shipping or add return fees; they might tack on charges at checkout. That’s become so popular that the point-of-sales company Square has a new feature to help businesses charge customers credit card fees. 

But Anderson warns that these tactics don’t always go over well with consumers.

“I think when they catch on to those things, you just kind of get a bad taste in your mouth,” he said. “You know, tell me what it costs. Just, like, be clear with me and transparent. Like, I just want to know what I’m paying for.” 

But the ever-changing nature of the tariffs leaves some businesses feeling like they can’t set firm prices. Janelle Zini at Aventura, a Spanish restaurant in Ann Arbor, Michigan, said adding a 3% service fee to checks felt more manageable than constantly recalculating the cost of paella.

“Do we want to, every single invoice be looking at how much did we get charged in addition on wine and deliveries and change menu prices correlated to that or do we want to have this overarching sustainability surcharge?”

The 3% charge means a $24 grilled shrimp dish is technically $24.72, plus tax and tip. Zini said she does get complaints from a handful of tables a week. 

“Do we have guests who ask us to remove it? Of course,” she said. “And will we? Of course.” 

Zini admits that raising prices is raising prices, no matter how you do it. But she thinks for diners, a small tax is easier to swallow than a more expensive entree.

“I still believe that it comes down to value perception,” she said. “And they understand it when we’re packaging it in a way that’s like this is allowing us to continue doing what we do and what we love to do.”

Esker Cycles, a mountain bike maker in Minneapolis, is adding a 10% tariff charge in September. Owner Tim Krueger says a custom $4,500 mountain bike will cost almost $5,000. His costs have gone up more than that, and he needs to pass some of that on. 

“Essentially spread the love, spread the hurt around, as best we can, where we take some,” he said. “But we can’t take it all.”

Kruger said one of the benefits of adding a surcharge instead of raising prices is the charge can easily be taken away in the future.

“It is my hope and my belief that these tariffs will not last very long,” Kruger said.