Credit card surcharging

When a customer pays with their credit card, a merchant can add a surcharge to the customer’s total price to cover the cost of the merchant’s card processing fees. Merchant’s must display the fee separately from the total price and offer the customer two different payment options. The customer can choose to accept the surcharge and pay with their credit card or choose to pay with cash without a surcharge. For example, if a merchant is eligible for surcharging and their customer chooses to pay with their credit card:
  1. Customer has a total cost for goods or services from the merchant’s store for $100.
  2. Merchant adds the three percent surcharge rate to the customer’s total cost.
  3. Merchant offers the customer two price options:
    a. $103 – Credit card payment
    b. $100 – Cash payment
  4. Customer chooses to pay with their credit card.
  5. Merchant receives a total payment of $103.

What you need to know about surcharging

Surcharges are:
  • Added to the total price of goods or services at the point of sale.
  • A maximum of three percent of the total purchase price.
  • A non-taxable amount because it is added only to the retail price.
  • Not applicable to e-commerce transactions.
Important: Check the surcharging requirements for each state and each card brand.