Merchant Surcharging – Understanding Payment Card Changes
What is a Surcharge?
A payment card surcharge is a fee that a retailer adds to the cost of a purchase when a customer uses a payment card.
Changes to Surcharging Fees in the United States & U.S. Territories
Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a surcharge on consumers when they use a credit card.
Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005.
What This Means for Consumers
Consumers will pay an additional fee when they use their credit card at retailers that decide to surcharge.
Consumers should be aware there are limits to the amount merchants can surcharge. *
Retailers are permitted to apply a surcharge to only credit card purchases and cannot impose a surcharge for purchases made using a debit or prepaid card.
If retailers intend to impose a surcharge on credit card purchases, they are required to notify customers before customers make an actual purchase at the store entrance and at the point of sale – or in an online environment, on the first page that references credit card brands.
Retailers must disclose surcharge fees on every receipt – both in store and online. Carefully review receipts where checkout fees should appear.
Retailers Can Offer a Discount for Cash and Check Purchases
Retailers can encourage their customers to use other forms of payment, such as cash and checks, and can discount for PIN debit, cash and checks.
States Where No Surcharge Laws Protect Consumers
Surcharging isn’t allowed everywhere. Currently, there are laws limiting surcharging in: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma, Texas and Utah. Consumers who are subjected to a surcharge in states where they may be prohibited from surcharging may want to report the retailer to their state attorney general’s office.
Click a state below to learn more about surcharging in these locations.
State Laws & Attorney General Contact Information
Visa’s Operating Regulations also continue to prohibit surcharging outside the U.S. unless there is a local law or variance that requires merchants be permitted to engage in the practice.
And please visit Consumer Action “Know Your Card.”
*Retailers must limit the amount of the surcharge to the applicable merchant discount rate for the credit card transaction surcharged. In cases where the applicable merchant discount rate exceeds 4% of the underlying transaction amount, in no event can the merchant assess a surcharge above 4%.