Surcharging is the practice of charging an additional percentage fee to credit card transactions in order to offset payment processing costs.
As of March 2021, most U.S. states allow merchants to surcharge on credit card transactions, with only Colorado, Connecticut, and Massachusetts having laws against surcharging.
If your state does allow surcharging, the major credit card companies require that you follow certain procedures and rules before you add a surcharge to your transactions:
- You must give credit card brands a 30 day notice of your intention to surcharge. With LawPay, a member of our support team will handle this notification process on your behalf, saving you a step in the process.
- You must notify your clients of your intention to surcharge, no later than the day you implement them. You could accomplish this by including the surcharge on your invoice, or displaying a sign on your website or office.
- A surcharge cannot exceed 4 percent per card brand regulations.
- You cannot surcharge debit card transactions. Surcharge fees are strictly limited to credit card transactions only.
To read more about surcharging, click here.