COVID-19 September 2020 Update: Fund&Grow is open and operational. We're experiencing slower response times and lower approvals from banks due to the Pandemic.

Home » Blog » legally-charge-fee

Can a Retailer Legally Charge You a Credit Card Processing Fee?

May 19, 2020

If you are charged a fee for making payments with your credit card, you may have wondered whether the practice is legal.

The answer to this question is yes. Since January 2013, merchants have been given the right to charge “checkout” fees for credit card transactions. This fee is also known as a surcharge.

When are surcharges permitted?

Barring 10 states - Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas – merchants are permitted to charge fees for credit card transactions all over the country.

However, such merchants must follow certain rules to ensure that customers are not caught off guard by the practice.

  1. Firstly, they must display a notice regarding the surcharge at the point of sale (both in-store and online) so that customers are aware of the surcharge before they execute the transaction.

  2. Secondly, the sales receipt must clearly indicate that a surcharge was added to the bill.

  3. Thirdly, the amount of surcharge must be the lesser of the following - what the merchant pays as card processing fees or 4%. In other words, the surcharge you pay must not, under any circumstances, exceed 4% of the bill amount.

  4. Finally, a surcharge cannot be imposed on transactions executed through a debit card. This is true even if the customer chooses to process the payment as a credit transaction (i.e., she signs for the payment instead of using his PIN).

Keep in mind that all these rules are valid for transactions processed within the U.S.

For payments made outside the U.S., merchants cannot impose any surcharges when you use a credit card.

What can you do if a merchant ignores surcharge rules?

To begin with, let’s make it clear that there are many merchants who prefer not to charge customers for using credit cards.

There can be various reasons for this:

Firstly, they may not be aware that they are legally permitted to impose a surcharge on consumers.

Secondly, they may not want to drive away prospective customers by adding this fee to the bill amount.

Thirdly, in certain industries, surcharges can actually complicate the sales procedure – hence, merchants prefer not to impose these fees on the consumers in the first place.

Keep in mind that in case the customer requests a refund for some reason, the merchants are obligated to refund the surcharge as well.

However, in case you find a merchant flouting surcharge rules – let’s say they impose a surcharge of more than 4% or fail to include the surcharge amount in the receipt, there are certain steps you can take to address the problem.

Call the number listed on the back of your card and inform your credit card issuer of the problem.

If all else fails, you can register a complaint online at the Visa or Mastercard website.

$50,000 - $250,000 of unsecured credit at 0% interest

At Fund&Grow, we utilize creative credit card financing in such a way that we can help clients with good credit obtain as much as $250,000 of unsecured credit at 0% for a period of 6, 12, or 18 months.

This amount can be used for any purpose – from financing a small business to providing a down payment on a property - no questions asked.

We will guide you every step of the way.

So, if you need these kinds of funds, call us at (800) 996-0270, and we will help you right away.


Ari Page Ari Page is the CEO of Fund&Grow. He resides in Spring Hill, Florida with his wife and two children.

Connect with Ari: linkedin-small-inline-connect-with-ari facebook-small-inline-connect-with-ari Ari Page on Twitter Ari Page on YouTube