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What is Surcharging?

What is surcharging - the pros and cons?

Businesses that accept credit cards have fees to process that are a constant headache.

Confusing pricing models, changing regulations and new technology often mean expenses that eat into your bottom line.

To help offset these costs, more businesses are turning to surcharging, or adding the cost of processing to customers’ purchases.

What is Surcharging at a Glance?

The first thing to know about surcharging is that you can only surcharge credit cards. You cannot surcharge debit cards. ​A surcharge, sometimes called a checkout fee, is an additional fee that a merchant adds to a consumer’s bill when he or she uses a card for payment.

Benefits to Surcharging

The obvious benefit of surcharging is that the burden of expense for processing will no longer fall on you. By passing the credit card fees to your customers, you’ll reduce your expenses while still allowing customers their choice of payment type. For businesses with thin margins, any cost reduction can be a big help.

Drawbacks to Surcharging

One of the potential drawbacks to surcharging credit cards is consumer opinion. Your customers may dislike surcharging so much that they choose to patronize other businesses instead of yours.

Steps to Begin Surcharging

If you decide that you do want to surcharge credit cards, the first thing you’ll need to do is contact your processor to enlist their help. Basic requirements for surcharging are as follows:

  • Surcharges may only be applied to credit cards.

  • The surcharge cannot be more than 4% of the transaction total, or your actual cost to process cards, whichever is lower.

  • You must inform Visa and MasterCard of your intent to surcharge cards at least 30 days before imposing surcharges.

  • You must post signage informing customers of surcharges.

  • Signage must be located at entrances to stores and at the points of sale.

  • Surcharges must be clearly labeled on a receipt, as a line item.

Interested in more information? Contact our sales team at

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