If you are one of the many merchants charging your patrons a surcharge for using a creditA return of funds posted by the merchant back to the cardholder. These funds will be taken from the merchant’s bank account and posted by to the cardholder’s account. card, you may be exposing your business to hefty fines and penalties if you’re not following the appropriate guidelines. After a recent class-action lawsuit, the card brands have established new regulations regarding surcharging credit card payers. Charging a surcharge is allowed, but you have to make sure you’re following the stringent rules of this new regulation.

As you may have heard, effective January 27, 2013, some merchants are permitted to surcharge customers for certain types of transactions. A payment card surcharge, also known as a checkout fee, is an additional fee that a merchantA business that accepts credit cards for goods or services. adds to a consumer’s bill when he or she uses a card for payment. Here are some important things to be aware of regarding merchant surcharging:

  • Merchants cannot surcharge Signature Debit (check cards), Pre-Paid Cards, or PINPersonal Identification Number used by a cardholder to authenticate card ownership for ATM or debit card transactions. The cardholder enters his/her PIN into a PIN pad. The PIN is required to complete an ATM/debit card transaction. Debit
  • The surcharge cannot exceed 4%
  • The surcharge amount must appear on the printed receiptA hard copy of the description of the transaction that took place. (requires programming)
  • The merchant is required to inform customers of the surcharge at the point of entry and at the point of sale
  • The merchant must notify Visa and MasterCard at least 30 days prior to implementing surcharging
  • 10 states currently prohibit surcharging. Merchants located in these states cannot surcharge any transactions, regardless of card type. These states are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Notification Process

It is important to note that there is a notification process merchants must follow in order to surcharge its customers. Merchants are instructed to register their intent to surcharge with both Visa and MasterCard. Those notification pages can be accessed by clicking below:

For Visa – Click here
For MasterCard – Click here
For Discover – Click Here and complete the resulting form

Merchants are also required to notify National Merchants Association, which is also done via email, so that we may build their terminalThe device by which a transaction is transmitted to the acquiring bank. programming file (to allow the surcharge amount on the receipt) and assist with a download. Merchants that have 3rd party hardware/software must make separate arrangements to have the surcharge option made available in their processing solution. These merchants must still contact National Merchants Association regarding their request of their participation in merchant surcharging.

Additional details can be found online at:

To accommodate merchants who decide to surcharge, National Merchants Association is Works For You® to secure the necessary programming for our most popular terminals. While suitable software is not available today, we expect that it will be released shortly. Another communication will follow when Verifone and Hypercom/Equinox downloads for surcharging are ready, and will include any further instructions or updates.

If you decide to surcharge your customers, you will need to go to the above sites. We will update this article as more information is available, or should any of the procedures outlined above change.