Premise: In the current economic environment, more and more entities and individuals are paying credit accounts with credit cards. For many merchants, this is acceptable as it reduces losses from returned checks and provides for more timely receipt of payment. However, such transactions also come with transaction fees the merchant pays to the credit card company. With tighter margins, many merchants are feeling those fees.

In 2013, a settlement between a group of merchants in the United States and the credit card companies answered once and for all the question of whether merchants could charge a fee to their customers to recover the transaction fees. The answer is “yes, but …”.

First, you need to review your agreement with your credit card provider to see if there are terms related to this issue contained in that contract.  Second, your credit card provider should have some form of a “merchants services” page on its website which will likely offer a Q&A addressing this issue. Many have a form you can download and complete to provide requisite notice of your intent to charge a surcharge – see

Generally, expect to be required to notify the card provider of your intent to levy a surcharge 30 days prior to beginning to enforce the charges. This is accomplished by the form referenced above. Surcharges apply only to credit card purchases; they may not be tacked onto debit or prepaid card purchases. The surcharge may not exceed your merchant discount rate with whichever card provider is at issue. You must disclose the surcharge to your customers by signage at the point of entry and the point of sale (in store or online) and on every receipt. In no event may the surcharge exceed 4%. And, while North Carolina, at this time, has no laws further complicating this issue, ten states od (none are contiguous to North Carolina.

The ultimate take-away from this article should be that the answer to the original question is “yes,” and it is up to you to determine if the amount recovered via a surcharge outweighs the potential costs related to customer relationships and administrative challenges in monitoring compliance.

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