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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: Maskot/Getty Images March 28, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Poonkulali Thangavelu is a senior writer and columnist at CreditCards.com and Bankrate, addressing debt and credit card-related legal and regulatory issues. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Bankrate logo The Bankrate promise
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Credit card have been a point of contention for merchants for many years. These are the fees that credit card payment networks, such as Visa and Mastercard, charge retailers for the service they provide of enabling credit card payments. Credit card sales enable merchants to enjoy higher sales volumes, and they have to pay the networks for enabling this service. It is quite common for retailers to pass on this fee to consumers via a surcharge. Swipe fees typically range from 1.5 percent to 3 percent, but should not exceed 4 percent or the merchant’s actual credit card processing costs. Reader Tom wonders: “What can happen if a restaurant does not tell you they are adding a surcharge?” Rules for credit card surcharges
There are specific rules for retailers to follow when it comes to surcharges on credit cards. In the past, Visa and Mastercard had forbidden merchants from passing on swipe fees to consumers through surcharges. However, after initiated by retailers, the card payment networks had to allow surcharges. A few states still prohibit or limit surcharges on credit cards, though, including Connecticut, Maine, Massachusetts and Oklahoma. Colorado is also currently in this minority group, but legislation passed in 2021 would allow credit card surcharges after July 2022. Before a merchant can start making surcharges on credit card transactions, it will have to notify the card network, as well as the bank that authorizes and settles card payments for the merchant, 30 days in advance. The credit card surcharge should also not be higher than the cost involved to the merchant of accepting a customer’s credit card. In other words, the merchant cannot profit from the surcharge. Credit card surcharges require adequate disclosure
In order to surcharge customers for credit card swipe fees, businesses have to make . Merchants should post notices at their business entrance and point of sale, advising customers about their credit card surcharge policy. The surcharge amount should also be separately itemized on the customer’s receipt. And online sellers have to disclose on their website that a surcharge will apply, where they first mention credit card acceptance. These sorts of disclosures ensure retailers do not engage in false advertising by citing a lower price and then slapping on a surcharge when the customer pays. Generally, businesses tend to state the higher price, adding on surcharges across the board. They can then advertise a discount for customers who pay in cash. Restaurants have to abide by such disclosures and cannot quietly tack on a surcharge when you pay your bill. They also cannot just state on their menu that there will be a surcharge for customers paying with a credit card, without making the other required disclosures. Recourse for inadequate credit card surcharge disclosures
If, like Tom, you’ve had the experience of eating at a restaurant that did not adequately inform customers about its credit card surcharge policy, you do have recourse. You could with the involved. You could also follow up with your state’s attorney general or department of consumer protection. And you could file a complaint with the Consumer Financial Protection Bureau. To support your case, you should also submit evidence of the restaurant’s noncompliance with the law, which could include pictures of the advertised price and your receipt, as well as details about the merchant’s location. The bottom line
Most states allow retailers to pass on credit card swipe fees to customers in the form of surcharges. There are specific disclosures they must make, though, and they can’t just add on a surcharge to your bill without notification. Tom, if a restaurant just added on a surcharge to your bill without following the required protocol, you could put in a complaint with the relevant authorities, with evidence to back up your claim. Hope the issue is settled to your satisfaction. Contact me at with your credit card-related questions. SHARE: Poonkulali Thangavelu is a senior writer and columnist at CreditCards.com and Bankrate, addressing debt and credit card-related legal and regulatory issues. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to Related Articles