Important disclaimer: This guide is for informational purposes only and is not legal advice. Surcharging rules change due to new laws, enforcement positions, and court decisions. Always confirm requirements with your processor/acquirer and qualified counsel before going live.
Quick Answer: What Most Merchants Need to Know
Credit card surcharging is legal in most U.S. states, but a handful of jurisdictions prohibit or heavily restrict it. Even where surcharging is allowed, you must follow both card network rules (Visa, Mastercard) and state pricing/disclosure laws.
Three things to understand before you start:
- Debit cards must NOT be surcharged under typical surcharging programs. Your checkout system must reliably distinguish credit from debit before applying any fee.
- Disclosure is mandatory — customers must see the surcharge amount before completing payment, at the point of entry, at the register/checkout, and on the receipt.
- The safest implementation is: disclose early, show the total before payment, print a clear receipt line item, and keep it consistent across all locations and channels.
Not sure whether surcharging or a cash discount program is right for your business? Read our comparison: Cash Discount vs Surcharge vs Convenience Fee.
U.S.-Wide Surcharge Rules That Apply Everywhere
These are your baseline operating standards regardless of state:
1. Apply Surcharging to Credit Cards Only
Your POS system or payment gateway must detect whether a card is credit or debit and apply the fee only to credit transactions. Do not assume a "debit run as credit" transaction is surchargeable — treat all debit products as not eligible unless your processor and the applicable rules explicitly allow a specific scenario.
2. Stay Within Permitted Caps
Set your surcharge percentage so it does not exceed:
- The applicable card network cap (Visa currently caps at the lower of 3% or your cost of acceptance)
- Your actual cost of accepting credit cards (a common compliance standard)
If you operate in multiple states, configure by location or use the lowest applicable cap across all locations.
3. Disclose in Three Places (Minimum)
- Point of entry — Store entrance sign or first page where payment methods are presented online
- Point of sale — Register/terminal screen or checkout page before the customer confirms payment
- Receipt — Printed or emailed, showing the surcharge as a separate line item
4. Show the Fee Before Payment
The customer must see the final total — including the surcharge — before tapping, inserting, swiping, or clicking "Pay." Surprising customers with a higher total after they've committed is both a compliance violation and a customer experience disaster.
5. Use Consistent Wording
Pick one label and stick with it everywhere:
- Recommended label: "Credit Card Surcharge"
- Avoid vague terms like "service fee" or "processing fee" when the fee is specifically a surcharge — this creates confusion and potential compliance issues
For the full implementation walkthrough including signage templates and receipt formatting, see How to Implement Surcharging the Right Way.
Implementation Notes: Setting It Up Correctly
A. Single-State vs Multi-State Operations
Single location / single state: Configure once, then test credit/debit differentiation, chip, tap, refunds, tips, and receipts.
Multi-state operations: Either:
- Configure rules by store location (best approach — lets you maximize recovery in permitted states while remaining compliant in restricted ones)
- Use a single conservative rule set across all locations (simpler but may leave money on the table)
B. Make Your Disclosures Customer-Proof
Unclear disclosures cause chargebacks, complaints, and compliance problems. Use these templates:
Entrance sign (in-store): "NOTICE: Credit card purchases may include a surcharge. The total will be shown before you pay."
Checkout screen (in-store or online): "If you choose a credit card, a surcharge will be added and shown in your total before you complete payment."
Receipt line item: Subtotal: $XX.XX Credit Card Surcharge: $X.XX Total: $XX.XX
C. Debit Card Testing (Do This Before Launch)
Test every card type your system will see:
- Debit chip transaction
- Debit tap transaction
- Debit PIN transaction (if supported)
- Credit chip and credit tap
- Prepaid cards (if your system can identify them)
Pass condition: Debit and prepaid cards should NOT receive the surcharge unless your specific program and processor explicitly support it.
D. Refunds and Tips (Where Merchants Get Burned)
- Full refunds: Confirm the surcharge is reversed and the return receipt/email reflects it
- Partial refunds: Verify the math is predictable and consistent
- Tips (restaurants/salons): Confirm whether the surcharge applies to the tipped amount and how your system calculates the total
These edge cases cause more compliance issues than the surcharge itself. Test them thoroughly before launch.
E. Staff Training Script (10 Seconds)
"If you use a credit card, there's a small surcharge to help cover processing costs. We show the total before you pay, and it prints on the receipt."
Every employee who handles payments should know this script. Inconsistent explanations create customer confusion and complaint escalation.
State-by-State Rules
Legend
- Permitted (Standard): Allowed under normal disclosure and network rules
- Permitted (Special): Allowed but with additional caps, signage, or pricing format requirements
- Prohibited: Do not surcharge — consider cash discount or dual pricing instead
- Unclear / High Caution: Legal status is contested or enforcement is complicated — use counsel and processor guidance before implementing
Prohibited / Effectively Prohibited States
Use cash discount, dual pricing, or all-in pricing in these jurisdictions:
- California — Treat as no-add-on at the register. If you want cost recovery, use all-in pricing or a dual pricing/cash discount program.
- Connecticut — Prohibited by statute.
- Maine — Prohibited for private merchants (limited government exceptions may exist).
- Massachusetts — Prohibited by statute.
- Puerto Rico — Prohibited.
Special / Restricted / High-Caution States
These states allow surcharging with additional constraints. Follow the state-specific rules on top of the universal requirements above:
- Colorado (Special cap): Capped at 2% or actual cost of acceptance, whichever is lower. Requires clear notice and receipt line item.
- Nevada (Special): Follow standard rules. If surcharge exceeds certain thresholds, expect heightened disclosure and documentation expectations.
- New York (Special pricing format): Treat as two-tier pricing — display a credit price and a cash price rather than a traditional line-item surcharge. The legal framework focuses on how the price differential is presented.
- Oklahoma (Unclear / High caution): Statutes and interpretations are contested. Do not implement without legal counsel and acquirer sign-off.
- Texas (Unclear / High caution): Legal landscape is complex and contested. Proceed only with counsel and acquirer approval.
- Georgia (Special): Disclosures and a "no profit" expectation apply — ensure signage shows the exact amount and that the surcharge does not exceed your actual acceptance cost.
- Michigan (Special): Strong signage expectations. Ensure disclosures are posted at entry, register, and on any online checkout where applicable.
- Minnesota (Special): Pay attention to pricing transparency requirements. Avoid any setup that makes the surcharge appear unavoidable or hidden.
- South Dakota (Special): Explicit disclosure expectations. The receipt must clearly show the dollar amount of the surcharge.
- Tennessee (Special transparency): Be careful with advertised pricing. Do not advertise a lower price than what is actually charged at checkout.
Permitted (Standard Rules) States
The following states allow credit card surcharging under standard disclosure and network rules:
Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.
For all Standard states: Disclose in 3 places, show total before payment, apply credit-only logic, include receipt line item, and keep the surcharge within network/cost caps. For multi-location businesses, document your policy and train staff so explanations match signage and receipts.
Online / eCommerce Implementation
If you sell online, surcharging has additional requirements:
- Place the disclosure early in the checkout flow — a product page footer does not count. It belongs near the cart or checkout start.
- Show a line item in the order summary before the customer submits payment.
- The emailed receipt must match the checkout display.
- If you sell into multiple states, your checkout system should detect the customer's billing/shipping state and suppress the surcharge for prohibited jurisdictions.
For eCommerce merchants, Unison's payment gateway integration supports surcharge configuration with state-level rules.
Best Alternatives When Surcharging Is Prohibited or Risky
If your state prohibits surcharging or the legal landscape is unclear:
- [Cash discount / dual pricing](/services/cash-discount): The most common alternative. Display two prices — a cash/debit price and a card price. Legal in all states.
- ACH incentives: Offer a discount for ACH/eCheck payments to encourage lower-cost payment methods.
- Minimum purchase amounts: Where allowed and clearly disclosed.
- Absorb fees and raise prices: The simplest customer experience — build processing costs into your pricing.
Go-Live Checklist
Use this checklist before launching your surcharge program:
- Confirm state status for every location you operate in
- Confirm your processor supports compliant surcharging
- Configure credit vs debit detection in your POS/gateway
- Set surcharge rate within network caps and cost-of-acceptance rules
- Add entry, POS/checkout, and receipt disclosures
- Test: credit, debit, prepaid, tap, chip, keyed entry
- Test refunds (full and partial) and tips (if applicable)
- Train all staff with a single consistent script
- Save compliance evidence: signage photo, sample receipt, checkout screenshot
Need help setting up compliant surcharging? Contact Unison Payment Solutions at (925) 290-6003 for a free consultation. We configure and test your surcharge program end-to-end — including POS setup, gateway configuration, and staff training materials.