Should You Pass on Credit Card Fees to Your Customers?

In all but a few states, it’s legal (and permitted by merchant agreement) to add a fee when customers pay by credit card. Known as “surcharging,” adding a fee enables restaurants to recoup the costs of accepting cards. 

Let’s take a look at the rules surrounding surcharges and questions to ask yourself to determine if it’s right for your business. 

Understanding Surcharging

Surcharging means adding a fee to a credit card transaction. Until 2013, it was prohibited by merchant agreements, and, in some states, by state law. In 2013, a class action lawsuit led to the removal of the surcharge prohibition from the card brands, meaning that businesses could add fees to credit card purchases unless they were in a state that prohibited it by law. 

However, even where legal, there are rules. Currently, if you want to surcharge a transaction, you must:

Only apply the surcharge to credit card purchase. Surcharges cannot be applied to debit card purchases, even if the debit card…