A surcharge is an additional fee a merchant adds to a credit card purchase to offset the cost of processing that transaction — typically the interchange cost charged by Visa, MasterCard, Discover, or American Express.

Yes. In most U.S. states, merchants may apply a surcharge to credit card transactions, but never to debit or prepaid cards.

The surcharge:

• Cannot exceed 3% of the transaction total
• Must appear as a separate line item on receipts
• Must be clearly disclosed at the point of entry and point of sale
• Requires 30 days’ advance notice to your processor before implementation

Merchants must also follow card brand rules for signage and notification to remain compliant.

Card brands require that you:

• Notify your processor/acquirer at least 30 days before starting surcharging.
• Include the surcharge data in the correct transaction field (Field 28).
• Apply surcharges only to credit cards — never debit or prepaid cards.
• Limit the surcharge to the lesser of your actual merchant discount or 3%.
• Disclose the surcharge both at the point of entry and point of sale, and on all receipts.

Yes. While federal law allows surcharging on credit cards, several states and territories prohibit or limit the practice.

As of October 1, 2025, American Butchers Solutions understands:

• Prohibited: Connecticut, Maine, Massachusetts, New York, Oklahoma, Puerto Rico
• Restricted: Colorado, Minnesota, New Jersey (specific compliance requirements)

⚠️ Note: This information is for general reference only and not legal advice. Always consult a qualified attorney before implementing a surcharge program.

Surcharging adds a fee to credit card purchases to recoup processing costs and must comply with all card brand and federal rules. Merchants cannot profit from the surcharge amount.

Cash Discounting offers a reduced price to customers who pay with cash or check instead of a card. When implemented incorrectly, some “cash discount” programs effectively function as surcharges — which can lead to rule violations and fines.

ABS can help ensure your program is structured correctly and compliant.

Yes. The maximum allowable surcharge is 3% of the transaction total or your effective processing rate, whichever is lower.

See Visa’s guidance on surcharging https://usa.visa.com/support/consumer/visa-rules.html#Can_I_add_a_surcharge_to_the_purchase_amount_when_accepting_a_Visa_card_-copy

Absolutely. You must:

• Display clear notices at the store entrance and point of sale.
• Identify the surcharge as a separate line item on each customer receipt.

Each merchant location must follow the laws of its own state.

If surcharging is prohibited where one store operates, that location may not surcharge — but locations in other states that allow surcharging may continue to do so.