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ID669 - Can Your State Recover Credit Card Fees?

Can your state recover credit card fees? That is up for debate in many states and the best option is to call your credit card processor.

 

**This is YOUR responsibility to confirm the rules in your state - noting that the fee percentage you charge must comply with the rules for the state that your business resides in and not the bill to address of the customers you are billing the fees to*

 

Our takeaways from a published article on the topic:
U.S. merchants won the right to start charging fees on credit card payments on Jan. 27, 2013. This came after a class-action lawsuit by merchants who wanted to charge fees to compensate for increasing credit card processing fees.  


Credit card surcharges are legal in the U.S., except in states which prohibit them
There are currently two states with active laws prohibiting these fees: Connecticut and Massachusetts.


Additionally, the maximum surcharge is 4% of the transaction amount or the cost of accepting that credit card as a payment method — whichever is lower.


Here is what the BTA attorney Robert Goldberg said when we had conflicting info on New York state;

"I see conflicting advice, but one must look at the most recent pronouncements:
What states can charge the credit card surcharge 2022?
• California
• Florida
• Kansas.
• Maine
• New York
• Oklahoman
• Texans
• Utah

In the following states, anti-surcharging laws remain on the books but are unenforceable due to recent court decisions:
• California
• Florida
• Kansas
• Maine
• New York
• Oklahoma
• Texas
• Utah

 

3.15.2024 Note from EVO (ID669 does comply with below)

Below are the regulations around surcharging and the states that prohibit surcharging all together:

Include the surcharge amount within a dedicated data field in the receipt or invoice.
Limit surcharging to credit cards only (debit cards and prepaid cards cannot be surcharged)
Limit the amount to your merchant discount rate (MDR) for the applicable credit card or 3%, whichever is lowest.
Disclose the surcharge as a merchant fee and, for both in-store and online transactions, clearly alert consumers to the practice at the point of entry and the point of sale or transaction.
As of February 15, 2024,  Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico, prohibit surcharging.

New York did recently update their surcharging. The changes include:

Requires that sellers clearly and conspicuously post the total price for using a credit card in a transaction, including the surcharge.
Prohibits sellers from charging a final price (including the credit card surcharge) that is greater than the posted price.
Prohibits sellers from imposing a surcharge on a consumer using a credit card that is greater than the amount charged by the credit card company to the seller for such card use.

Ways to comply with this would be:

Listing both the total credit card and total cash prices (as one often sees at gas stations);
Listing the total credit card price and notifying consumers that there is a discount for paying with cash; or
Charging the same regardless of whether the consumer uses cash or card.

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