Rules when wanting to charge surcharges

Legal + Regulatory, Point of Sale,
Source: Merchant Maverick

Surcharging is applying a fee on top of a bill if a consumer uses a credit card to pay. If you are thinking about implementing a Surcharge in your establishment, here a few things you need to consider:

Is it legal to allow Surcharges?
  • Restaurants can apply surcharges UNLESS they are in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, or Texas
  • Remember: Surcharges are for credit purchases only, not debit or prepaid cards. Also, even if surcharging is illegal, you can still offer discounts for cash or check purchases.
If legal, are there any requirements?
  • ​Yes. If you are thinking about surcharging, you need to reach out to your card association & check with your POS system to make sure they can meet requirements (mPOS such as Square and Papal do not allow for surcharging)
  • Some requirements may include limits, notice posted for consumers & notifying card association in advance
Product-Level or Brand-Level Surcharges?
  • Product-level: Surcharge same for all products; ie: signature rewards cards or commercial cards, etc.
  • Brand-Level: Surcharge same for all brands; ie: Visa, Mastercard, AMEX, etc.
In order to implement surcharges in your establishment, restaurateurs need to contact individuals cards for requirements, contact POS merchant to see if system can do surcharges or see what cost would be to make changes, and have some training for staff to be able to convey what and why fees are being charged for that particular card brand or product.