For many merchants , the cost of accepting credit cards has become one of the highest operating costs after payroll . With each dollar now carrying more weight than ever , merchants can find relief in leveraging an increasingly popular option called credit card surcharging . Introduced in 2013 , and now allowed in most all states , credit card surcharging enables businesses to pass on the fee when customers choose to use card .
However , there are firm rules issued by card brands and state regulations to make sure that you , the merchant , do nothing to discourage customers from paying with their card brand over others . Fortunately , the overall guidelines for the networks are mostly the same :
1 . You must notify the card association and your merchant services provider of your intent , in writing , at least 30 days in advance . ( Note : American Express surcharge rules do not require you to provide notice so long as you comply with all other rules .)
2 . Surcharge amounts are limited to your effective rate for credit card transactions , capped at 4 % ( 2 % in Colorado ). In other words , you can ’ t profit from surcharges ; you can only recoup your baseline costs .
3 . You must post appropriate notice inside your store , both at the entrance and at the point of sale . Similar rules apply to eCommerce businesses at the website ’ s checkout page .
4 . Surcharge amounts must be included on the receipt as a separate line item . The surcharge also needs to be in the network authorization request and settlement .
5 . Finally , you need to ensure that your payment gateway or processing equipment , as appropriate , is programmed to accurately record surcharges in accordance with the card network requirements .
Now that we ’ ve covered the core rules , let ’ s take a closer look at some of the common questions that come up with surcharge processing .
Notify the Acquirer & Card Networks The best way to notify your processor of your intent to start surcharging is to reach out to the account representative for your merchant account and ask how they want to proceed . You must provide written notice , so a phone call isn ’ t sufficient .
Give Appropriate Notice to Consumers If you plan to add surcharges , you need to post a notice at the entry to your store and a notice at your point of sale , which must include the rate you charge and a comment that it doesn ’ t exceed your processing fees . Visa ’ s website has a resource page for merchants who plan to surcharge their credit card transactions , including downloadable sample signage .
Correctly Document Surcharges on Credit Card Transactions If you plan to implement surcharges , keep in mind that Visa , Mastercard , and Discover require your point-of-sale system to include the surcharge as a line . You must also report all surcharges back to your processor and the credit card networks .
58 NATDA Magazine www . natda . org 58 NATDA Magazine www . natda . org