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Surcharge Compliance

If you are considering introducing a credit card surcharge for your customers, it is important to understand that there are specific rules and regulations that must be followed when enrolling in and operating under a surcharge plan.

This article provides a general overview of common surcharging requirements. This content is provided for informational purposes only and does not constitute legal advice. It is the responsibility of each merchant to review, understand, and comply with all applicable laws, card-network rules, and regulatory requirements, including notification timeframes, signage requirements, surcharge percentage limits, and jurisdictions where surcharging is prohibited.

If you are unsure about the laws or regulations applicable to your business, you should consult with qualified legal counsel. Dough assumes no liability for a merchant’s compliance or non-compliance with credit card surcharging rules or regulations.

Transparent Communication
Card networks, including Visa, Mastercard, Discover, and American Express, require merchants to clearly and transparently disclose when a credit card surcharge is applied.

businesss must clearly notify customers of a credit card surcharge through appropriate signage placed at the business entrance, at the point of sale or terminal, and anywhere payments are accepted. If payments are accepted online, surcharge disclosures must also be clearly visible on the business’s website. All disclosures must inform customers that the surcharge applies only to credit card transactions.

Surcharge Limits
Credit card surcharges must comply with both card-network rules and applicable law. The surcharge amount may not exceed the merchant’s actual cost of accepting credit cards and may not exceed 3% of the total transaction amount.

Card-network rules cap credit card surcharges at 3%, meaning that if a merchant’s processing costs exceed this amount, the excess portion cannot be passed on to the patient.

Network and State Restrictions
The major credit card networks, such as Visa and Mastercard, impose specific requirements related to surcharge limits, advance notification, and disclosure.

In addition, several U.S. states and territories regulate or prohibit credit card surcharging. At the time of writing, credit card surcharging is prohibited in Connecticut, Maine, Massachusetts, and Puerto Rico. Other states, including Colorado, Minnesota, Mississippi, New Jersey, and New York, impose restrictions on surcharge amounts or require specific disclosures.

If your business operates in a state that restricts or prohibits credit card surcharging, you must fully understand and comply with those requirements before implementing a surcharge.

Debit card transactions may never be surcharged, even if the debit card is processed as a credit transaction.

Applicability
Credit card surcharges may be applied only to credit card transactions. Other payment types, including debit cards and alternative payment methods, are not eligible for surcharging.

Regulatory Compliance
Merchants are responsible for maintaining ongoing compliance with all applicable card-network and legal requirements. This includes meeting advance notification obligations, using compliant signage and disclosures, adhering to surcharge percentage limits, and respecting jurisdiction-specific restrictions.

By following these guidelines, dental businesss can implement credit card surcharging in a way that aligns with card-network rules and promotes transparency with customers. Clear and upfront communication helps maintain patient trust and supports a positive payment experience.