Surcharge — customer pays the credit-card fee at checkout.
The customer chooses to pay with a credit card knowing a fee will be added. On credit-card transactions, your processing cost can approach 0% before debit, network and other fees. Strict rules apply: capped percentage, mandatory disclosures, debit cards exempt, banned in some states.
If you’ve set up a surcharge program before, this is the current rules sheet.
Visa cap: 3%. Mastercard cap: 4% as of our last review — a pending Visa/Mastercard merchant settlement (preliminary court approval June 2026) would lower the credit-card surcharge cap to 3% if finalized, so check current rules before you launch. Effective max today: 3% for most merchants. Cap is also limited to your actual cost of acceptance (your MDR) — never higher.
Banned (as of our last review): Connecticut, Massachusetts, Maine. California is grey area (federal court ruling allows with disclosure, state code still on books, restaurants exempted from ban). Puerto Rico (US territory) bans surcharging.
Capped (cap less than 3%): Colorado 2%, Oklahoma 2% (effective Nov 1, 2025). New York, New Jersey, South Dakota, Nebraska, Georgia: surcharge cannot exceed your actual processing cost. Nevada has no statutory cap that we have confirmed; the Attorney General advises keeping surcharges within actual acceptance cost.
Recent updates: Kansas legalized surcharging effective Jan 2025. Oklahoma legalized with 2% cap effective Nov 1, 2025. Minnesota (Jan 1, 2025) and Virginia (SB 1212, July 1, 2025) enacted price-transparency laws that affect how mandatory fees are advertised.
What “surcharging” actually means.
If you’ve never set this up, this is how the program works in plain English.
You post the same prices as before.
Your menu, shelf tags, and website show the same prices customers are used to. Nothing changes about how you display prices.
At checkout, a fee is added to credit-card transactions only.
If the customer pays cash, debit, or check — no fee. If they pay with a credit card, a percentage (typically 3%) is added before they confirm payment. The fee shows on their receipt as a separate line item.
You collect the customer’s fee, processor takes the matching cost.
The fee the customer pays approximately covers what the processor would have charged you. Your net effective rate on those credit transactions can approach 0%, depending on your card mix and volume. You still pay normal rates on debit (and absorb that, since debit can’t be surcharged).
The five non-negotiable rules card networks enforce.
These come from Visa and Mastercard’s public surcharging rulebooks. Violating them can lead to fines assessed against your acquirer (typically passed on to the merchant), repeated violations, and possible account termination. Penalty amounts vary by network and case.
Surcharge only credit cards. Never debit or prepaid.
Even if a debit card is run as “credit” at the terminal, it’s still a debit card. Surcharging it violates federal Durbin Amendment rules. Your terminal must distinguish credit from debit using the BIN (the first 6 digits of the card number) and skip the surcharge automatically on debit and prepaid.
Cap: lesser of your MDR, the network max, or your state cap.
Whichever of these three is smallest is your maximum: (1) your actual merchant discount rate — you can’t profit from the surcharge; (2) Visa 3% / Mastercard 4%; (3) your state cap (e.g., Colorado 2%). The lowest applies. Most properly-set merchants land at 3% nationally because Visa is the binding constraint.
30-day advance notice to your acquirer.
Before turning on surcharging, you must notify your acquiring bank (your processor’s sponsoring bank) at least 30 days in advance. Visa removed its own direct registration requirement in April 2023, but the acquirer notice still applies. Tabletop handles this filing for you.
Disclosure at point of entry, point of sale, and on every receipt.
Signage at your front door (or homepage for online), again at the register/checkout, and the surcharge must appear as a separate line item on every receipt. Visa and Mastercard publish exact signage font sizes and language. Cardholders must know about the fee before committing to the transaction.
Brand-level OR product-level — pick one, stick with it.
You can either surcharge all credit cards from one network (brand-level — e.g., all Visa credit) or specific products (product-level — e.g., Visa Signature only). You can’t mix. And you must surcharge every brand at the same level or below your “most expensive” competitor — you can’t single out Amex with a higher fee than Visa.
Where surcharging is legal, capped, or banned.
Last researched: October 2026. State entries below are summaries, not legal advice; verify with the statute or counsel before relying on them. Surcharge laws change frequently — this is current as of publication, not legal advice. Recent changes: Kansas legalized in January 2025; Oklahoma legalized with 2% cap on November 1, 2025.
Banned outright
Connecticut
Conn. Gen. Stat. § 42-133ff prohibits credit-card surcharges. State Attorney General actively enforces. Cash discount programs are legal as alternative.
Massachusetts
Mass. Gen. Laws ch. 140D § 28A prohibits surcharging credit-card transactions. Cash discount remains legal.
Maine
Maine Revised Statutes Title 9-A § 8-509 bans surcharging. Dual pricing / cash discount widely used as alternative. Some interpretation of Maine law allows dual pricing under that ban.
Puerto Rico
Law 5 of 1973 prohibits credit-card surcharges. US territory, not a state, but applies for any merchant operating there.
Allowed with restrictions / caps
Colorado
SB 22-091 caps surcharge at 2%. Strict disclosure required. Effective since 2022.
Oklahoma
Senate Bill 677 effective Nov 1, 2025. Cap: 2% or actual processing cost, whichever is lower. Credit only, not debit. Disclosure at point-of-entry, POS, websites, plus verbal disclosure for phone transactions.
Nevada
We have not confirmed a Nevada statute that caps surcharges. The Attorney General has advised that surcharges not exceed the actual cost of acceptance and that consumers can ask for documentation. Treat actual cost as your limit.
New York
NY Gen. Bus. Law § 518 (updated rules effective Feb 11, 2024). Surcharge cannot exceed the merchant’s cost of acceptance. You must post the highest total price including the surcharge, and the final price cannot exceed the posted price. Fines up to $500 per violation.
New Jersey
NJ P.L. 2023, c.146 (N.J.S.A. 56:8-156.1 and -156.2): a seller may surcharge a credit-card payment up to its actual cost of processing and must disclose the surcharge before the customer incurs it — posted at entry and at the point of sale (on menus and in the service area for restaurants), at checkout online, and verbally by phone. Violations are treated under the Consumer Fraud Act. A bill to ban surcharges (S595) has been introduced; it was not law as of our last review. Cash discounts and dual pricing are not addressed by the surcharge statute; confirm your structure with counsel.
South Dakota
Surcharge cannot exceed cost of card acceptance.
Nebraska
Surcharge cannot exceed cost of card acceptance.
Georgia
Surcharge cannot exceed cost of card acceptance. Convenience fees allowed only if alternative payment methods accepted.
Illinois
Illinois’ Interchange Fee Prohibition Act (interchange on sales tax and gratuity) has had its effective date delayed more than once. We have not confirmed a state cap on surcharges. Check the current status and how your processor implements it before launching.
Minnesota
Minn. Stat. 325D.44 price-transparency rules (effective Jan 1, 2025) require mandatory fees to be included in the advertised price. A card surcharge a customer can avoid by paying another way is generally treated as optional, but confirm your structure.
Virginia
SB 1212 (effective July 1, 2025) is a total-price display law: advertised prices must include mandatory fees and surcharges. Civil penalties up to $2,500 ($5,000 for repeats).
California
Civil Code § 1748.1 still bans surcharges on its face, but per the California Attorney General it is unenforceable against merchants similarly situated to the plaintiffs in Italian Colors v. Becerra (9th Cir. 2018). Misleading-pricing rules still apply. Verify the current Attorney General position and your own situation before launching.
Texas
Texas statutes still prohibit surcharging, with a $500 per-offense penalty. A federal court ruling may limit enforcement, but we have not confirmed the current position. Use a cash discount or dual pricing unless counsel advises otherwise.
Kansas
K.S.A. 16a-2-403 was amended effective January 1, 2025 to permit surcharging with disclosure. There is no state cap; card-network caps still apply.
Allowed under standard federal & card-network rules
We did not find additional state-specific surcharge restrictions in the remaining states as of our last review, but state law changes often and we did not read every statute. Federal disclosure rules and card-network caps apply everywhere; confirm before launching.
33 other states
Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming.
Florida
State law technically prohibits surcharging, but a 2015 federal court ruling found it unenforceable. Effectively legal with proper disclosure.
When surcharging is the right call.
Surcharge fits when:
- You operate in a state where it’s clearly legal (33+ states with no special restrictions).
- Your customers are price-sensitive and likely to choose cash or debit if given a clear option.
- Your margins are tight and 2–3% in fees is meaningful profit.
- Your industry has moved toward fee transparency (gas stations, mechanics, contractors, B2B).
- You’re comfortable with some customer education at the register.
Surcharge does NOT fit when:
- You operate in CT, MA, ME, or PR — banned outright.
- You have multi-state operations and managing per-state compliance is too complex.
- Your customer base would feel penalized (e.g., medical, dental, funeral, premium hospitality).
- Your effective MDR is already very low (under 1%) — the surcharge wouldn’t move the needle.
- Your terminal/POS can’t reliably distinguish credit from debit at BIN level.
Frequently asked — surcharging.
Surcharge done compliantly.
Tabletop sets up surcharge programs that comply with state law, card-network rules, and your specific industry requirements. We file the acquirer notice, configure your terminal’s BIN-level debit detection, and provide the signage. If you’re multi-state, we configure per-location compliance.