Can I charge my customers credit card fees?

Can I Charge My Customers Credit Card Fees?

Yes, in most US states, merchants can now add credit card surcharges to their customers’ bills. This practice was previously restricted, but a legal change in 2013 made it permissible. However, businesses should be aware of applicable state and card network rules before implementing such fees.

Legality of Credit Card Surcharges

In 2013, the Dodd-Frank Wall Street Reform and Consumer Protection Act removed the ban on credit card surcharges. This change allows merchants to pass on the cost of processing credit card transactions to their customers.

However, there are some restrictions in place. For example, some states have their own laws governing credit card surcharges. Additionally, card networks, such as Visa and Mastercard, may have their own rules regarding surcharges.

State Laws

The legality of credit card surcharges varies from state to state. In some states, such as California and New York, surcharges are prohibited altogether. In other states, surcharges are allowed but may be subject to certain conditions.

For example, in Florida, merchants can add a surcharge of up to 4%. However, the surcharge must be clearly and conspicuously disclosed to customers before they place their order.

Card Network Rules

Card networks, such as Visa and Mastercard, also have their own rules regarding surcharges. These rules vary depending on the network and the type of card used.

For example, Visa allows merchants to add a surcharge of up to 4% for Visa Signature and Visa Infinite cards. However, Visa Platinum and Visa Classic cards are exempt from surcharges.

Implementing Credit Card Surcharges

If you decide to implement credit card surcharges, it is important to do so in compliance with state and card network rules. Here are some tips:

• Clearly disclose the surcharge. Customers must be informed of the surcharge before they place their order. The surcharge should be displayed on the menu, website, or receipt.
• Only charge for actual costs. The surcharge should only cover the actual cost of processing the credit card transaction.
• Be consistent. Apply the surcharge to all customers who use credit cards.
• Monitor the impact. Track the impact of the surcharge on your sales and customer satisfaction.

Conclusion

Credit card surcharges can be a way to offset the cost of processing credit card transactions. However, it is important to be aware of the applicable state and card network rules before implementing such fees. By following these guidelines, businesses can avoid legal and compliance issues.