Is It Legal To Pass Credit Card Fees To Customers?

The short answer is yes.

Starting in 2013, it became legal to charge customers extra for using a credit card.

Retailers can also require a minimum purchase amount when you use credit cards.

But merchants need to follow specific rules when adding credit card surcharges.

Can you pass on credit card fees to customers?

All merchants are allowed to charge their customers a convenience fee for using a credit card if the customer is using a non-customary payment channel. The practice of always charging customers a fee for credit card payments, no matter how the transaction takes place, is called a surcharge.

What states is it illegal to charge extra for credit card?

Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions.

Are credit card processing fees subject to sales tax?

Paying Fees on Sales Tax

When you process a credit card transaction, your customer’s credit card is charged for the total amount of the sale including sales tax. In a retail environment where sales tax is paid on almost every transaction, the increased processing fees can amount to a substantial yearly expense.

Convenience fees and surcharges are legal, as long as they stay under a certain percentage of the purchase price and aren’t assessed in a state that bans them.