Surcharging is the practice of adding a fee to credit card sales in order to cover the cost of the merchant’s card processing fees. This seems like a great benefit to merchants however there are many restrictions on how and where this practice can be used. Some merchants who are able to take advantage of this program actually choose not to due to the drawbacks, which will be covered in this article.

The card associations and individual states have fought against surcharging for many years in an effort to protect consumers. As of this writing, surcharging has been made legal in some states but is still being contested in federal courts. Due to these ongoing legal disputes which could potentially lead to surcharging being made illegal at any time, Fattmerchant has chosen not to participate in surcharging.


Currently surcharging is illegal and not supported by any payment processors in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.

For those merchants not in prohibiting states, laws and card brand regulations restrict how surcharging can take place and the following guidelines must be followed:


  • Surcharge amount cannot exceed your processor fee (up to 4% max)
  • Notice of surcharging must be posted for customers to see
  • 30 day notice must be provided, in writing, to card associations and your processor
  • Debit and prepaid cards cannot be surcharged, only credit cards
  • Surcharge amount must be a separate line item on the receipt


Being able to adhere to these rules requires having a POS system and merchant service provider that are able to accommodate and perform all of the necessary functions. In addition to these challenges, some feel that surcharging would not be well received by customers and choose not to do it for that reason. 

Again, Fattmerchant members are unable to participate in surcharging at this time since there is still a lot of uncertainty surrounding the path that future legislation will take when it comes to surcharging. Should surcharging ever be made widely legal, Fattmerchant will reconsider supporting the practice.