Do Merchants Have to notify consumers of credit card surcharges? 2022

Using a surcharging fee or convenience fee has 3 rules in place they must follow.

Any convenience fee must be disclosed before transaction

Convenience tax must be displayed on customers receipt

All credit card surcharges must be below 4 %

If you are conducting business in New York or California, you legally have to inform customers of any credit card convenience fees that may appear on their bills prior to purchase. If you live elsewhere, the legalities may differ, but you do have a moral obligation to warn people, especially nowadays when many are out of work and on a tight budget. If you charge people without warning, it could be considered sneaky and dishonest because it kind of is. If you have any interest in building a repeat customer base, it’s a good practice to lay everything out ahead of time so people can decide to pay cash or debit to avoid convenience fees.
The state and federal governments have different rights and responsibilities in terms of creating and upholding laws. Because the individual states are tasked with deciding who should pay the debit and credit card convenience charges to businesses, the practice varies depending on the state in which you are living and dining. As of the publication of this article, only two states have limited businesses in terms of rendering the consumer responsible for credit and debit fees; California and New York. In these two states, the practice is allowed, but they’re required to warn the customer, giving them the option of avoiding fees by paying cash or debit. This may change over time, one way or another, but if you live in any of the other states, it is perfectly legal for businesses to add debit and credit card convenience charges to bills being paid by credit card. Your state might reconsider, so it’s best to familiarize yourself with the laws regularly anyway. Please bear in mind that a Visa debit for example would not be charged fees because it is considered a debit card. It’s kind of a gray area, which is why some restaurants are choosing to tack on debit convenience charges to what they charge credit card users.

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