Credit card surcharging: what your state actually allows
Four jurisdictions still prohibit it outright. Six more allow it only with a cap or a specific disclosure. Three struck their bans down in court and left the statute sitting in the code anyway. Every rule below is cited to the statute or the opinion.
Judd Alsup and the Equip Payment Solutions team, who install and support restaurant POS systems nationwide and sell Shift4 Dine and Clover.Updated August 9, 2026. Sources and dates cited on every figure.
The short answer
Surcharging a credit card, in one box:
- Debit cards can never be surcharged not because of federal law, which is silent, but because Visa and Mastercard both prohibit it by contract. Texas also bans it by statute at Tex. Bus. and Com. Code 604A.002.
- The cap is your own cost neither network permits a surcharge above your cost of acceptance. Visa caps at 3% on top of that, Mastercard at 4%.
- Thirty days notice is required to your acquirer, and for Mastercard to Mastercard as well, before the first surcharged transaction.
- Four jurisdictions prohibit it Connecticut, Maine, Massachusetts and Puerto Rico.
- Six states allow it with strings Colorado, Kansas, Minnesota, New Jersey, New York and Oklahoma each impose a cap, a disclosure format, or both.
The rest of this page is the case for each line, with sources.
The federal picture, which is emptier than people expect
There is no federal law prohibiting a restaurant from surcharging a credit card. There is also no federal law prohibiting a surcharge on a debit card. The Durbin Amendment at 15 U.S.C. 1693o-2 is frequently cited for the debit prohibition and it does not contain one: what it contains is a protection running the other way, barring card networks from stopping a merchant offering a discount for cash, check, debit or credit. Regulation II at 12 CFR Part 235 does not address merchant surcharges at all.
The debit prohibition is contractual. Visa's published merchant Q and A instructs merchants to limit surcharging to credit cards only, and answers the obvious follow-up directly: a debit cardholder who selects credit at the terminal is still using a debit card and still may not be surcharged. Mastercard states the same position, tying it to the class merchant settlement agreement. A restaurant that surcharges debit is not breaking a federal statute. It is breaking its card acceptance agreement, which in practice is worse, because the acquirer can be fined immediately and the cost lands on the merchant.
One state does ban debit surcharging by statute. Texas prohibits it at Tex. Bus. and Com. Code 604A.002, and unlike the Texas credit card provision that sits beside it, that section has not been struck down. Read the two sections separately. They have had very different histories.
Where surcharging is prohibited or restricted
| Jurisdiction | Status | What the rule actually says | Authority |
|---|---|---|---|
| Connecticut | Prohibited | Broader than credit. No person may impose a surcharge on any transaction, where surcharge means any extra charge for the privilege of using a particular payment method. Discounts allowed with posted notice. | Conn. Gen. Stat. 42-133ff |
| Maine | Prohibited | A seller may not impose a surcharge on a cardholder who elects to use a credit or debit card. A discount from the regular price is expressly not a surcharge. | 9-A M.R.S. 8-509 |
| Massachusetts | Prohibited | No seller may impose a surcharge on a cardholder who elects to use a credit card in lieu of cash, check or similar means. | M.G.L. c. 140D 28A |
| Puerto Rico | Prohibited | Covers credit and debit. No merchant may impose an additional charge on a consumer choosing a valid payment method. | Ley 150-2008, as amended |
| Colorado | Capped | Pick one method: 2% of the total, or your actual merchant discount fee. Prescribed signage on premises or before online checkout, plus a separate receipt line. No surcharge on cash, check, debit or gift card redemption. | C.R.S. 5-2-212 |
| Kansas | Disclosure | No longer a ban as of 1 January 2025. Permitted with clear and conspicuous notice at point of entry and point of sale, in advance of the transaction. No percentage cap in the statute. | K.S.A. 16a-2-403 |
| Minnesota | Capped | Disclosed orally and by posted sign in person, on the checkout page online, orally by phone. The surcharge may not exceed five percent of the purchase price. | Minn. Stat. 325G.051 |
| New Jersey | Capped | May not exceed the actual cost to process the payment. Restaurants specifically must post the notice in the customer service area and on the menu. Violation is a Consumer Fraud Act unlawful practice. | P.L. 2023, c. 146 |
| New York | Posting format | Not a ban since 11 February 2024. You must post the total credit card price inclusive of the surcharge, and the final price may not exceed the posted price. Two tier pricing is expressly allowed. $500 per violation. | Gen. Bus. Law 518 |
| Oklahoma | Capped | No longer a ban as of 1 November 2025. Notice at point of entry and point of sale. No surcharge above 2% of the total transaction or the actual amount charged, whichever is less. | SB 677 (2025) |
Sources, all fetched 13 August 2026: Connecticut General Assembly (Conn. Gen. Stat. 42-133ff), Maine Legislature (9-A M.R.S. 8-509), Massachusetts Legislature (M.G.L. c. 140D 28A), Puerto Rico OGP (Ley 150-2008 as amended by Ley 152-2013), Colorado Office of Legislative Legal Services (C.R.S. 5-2-212), Kansas Revisor of Statutes (K.S.A. 16a-2-403), Minnesota Revisor (Minn. Stat. 325G.051), New Jersey Legislature (P.L. 2023 c. 146), New York Senate (Gen. Bus. Law 518) and New York Department of State guidance, Oklahoma Legislature (SB 677 enrolled). This table is not a substitute for legal advice, and it does not cover every one of the fifty state codes.
The three states where the ban was struck down, and why that helps you less than it sounds
Texas, credit card provision
Tex. Bus. and Com. Code 604A.0021 still appears in the code. It was held unconstitutional as applied and permanently enjoined in Rowell v. Paxton, 336 F. Supp. 3d 724 (W.D. Tex. 2018), but the injunction runs to the Rowell plaintiffs. The Texas Attorney General's own opinion KP-0257 says circumstances may still exist where the section operates to prohibit a surcharge. Note again that the separate debit ban at 604A.002 stands.
Florida
Fla. Stat. 501.0117 still prints in the Florida Statutes as a second degree misdemeanor. The Eleventh Circuit struck it as an unconstitutional abridgment of free speech in Dana's Railroad Supply v. Attorney General, 807 F.3d 1235 (11th Cir. 2015). No repeal has followed in the decade since. It is a dead letter in practice and live text on the page.
California
Cal. Civ. Code 1748.1(a) still reads that no retailer may impose a surcharge on a cardholder who elects to use a credit card. The Ninth Circuit in Italian Colors Restaurant v. Becerra, 878 F.3d 1165 (9th Cir. 2018) expressly modified the relief to apply only to the plaintiffs, and only to the specific pricing practice they had declared they wanted to use. A California restaurant that was not a plaintiff in that case is not covered by that judgment.
What to do with that
If you operate in Texas, Florida or California, the honest answer is that the statute is on the books, the courts have found it constitutionally infirm, and the injunctions protect named parties rather than you. Most operators in those states surcharge without incident. That is an observation about enforcement, not a legal opinion, and it is worth an hour of a local attorney's time before you build it into your pricing.
The network rules, which bind you in all fifty states
Never above your cost of acceptance
Both networks state it plainly. Visa adds a hard 3% ceiling for merchants whose cost exceeds 3%. Mastercard's absolute cap is 4%, applying only where cost of Mastercard acceptance is above 4%. Surcharging both brands means the lower effective figure binds on each transaction. A flat 3.5% applied to everything is a rule violation on Visa and probably above cost on both.
Thirty days notice, in writing
Visa requires notice to your acquirer at least 30 days before you start. Mastercard requires notice to both Mastercard and your acquirer at least 30 days ahead, and requires the acquirer to register the merchant within 10 days of being told. Your processor should file this. Confirm that it did.
Signage at the door and at the till
Visa requires disclosure at the point of entry and the point of sale, and the surcharge shown as a separate line on the receipt. Mastercard requires the disclosure to state that the surcharge is not greater than your merchant discount rate, and the dollar amount on the receipt. In New Jersey a restaurant must also put it on the menu.
Refund the surcharge with the sale
Mastercard is explicit: on a return, the purchase amount plus the surcharge goes back to the cardholder. A POS that refunds the food and keeps the fee is generating chargebacks.
You cannot stack a convenience fee
Mastercard prohibits assessing a convenience fee on credit transactions if you surcharge, and its convenience fee program is limited to pre-certified government and education entities in any case. A restaurant cannot relabel a surcharge as a convenience fee.
Brand level or product level, not both
Visa permits surcharging at the brand level or the product level and prohibits mixing them.
What your POS has to be able to do, and what most cannot
Every rule above is a configuration problem before it is a legal one. The system has to apply the surcharge to credit only and recognise a debit card presented as credit, which is the exact case Visa calls out and the exact case a badly configured terminal gets wrong. It has to cap the charge at your cost of acceptance, which means the number has to be maintained as your effective rate moves rather than typed in once. It has to print the surcharge as its own line on the receipt with the dollar amount. It has to return the surcharge on a refund. And in Colorado it has to hold to one method, either the 2% or your actual fee, consistently.
The honest position from a dealer: this is one of the few places where the software genuinely differs, and it is worth asking a vendor to demonstrate a debit-presented-as-credit transaction on the demo unit rather than taking the datasheet's word for it. We program this for the rooms we install, and we would rather explain the mechanism here than have an owner discover the debit rule from an acquirer's fine.
If your card mix is debit heavy, run the arithmetic before you build a surcharge programme at all. A surcharge that can only touch credit leaves a large part of your volume untouched, and a cash discount or a dual price structure may move more money. That comparison is on the cash discounting page, and the raw numbers are in the fee calculator.
What the major systems charge
| System | Software | Card present rate | Contract | The part they lead with least |
|---|---|---|---|---|
| Toast | $0 to $69per terminal, reported | 2.49% to 3.69%+ 15c, reported | 1 to 3 years | The rate climbs with add-ons. Online ordering and delivery move Starter Kit from 3.09% to 3.39%, and gift cards and loyalty take it to 3.69%. That higher rate then applies to every order, not just the online ones. Processing is mandatory and hardware is locked to Toast. |
| Square | $0 / $49 / $149per location, published | 2.6% / 2.5% / 2.4%+ 15c, published | None | The free plan carries the highest rate. Above roughly $25,000 a month in card volume it costs more than the paid one. Kitchen display and kiosk are excluded from free. |
| Clover | $89.95 to $129.85plus $849 to $4,447 hardware, reported | 2.3% + 10crestaurant plans, reported. The reseller sets your final rate | 36 months | Your rate depends entirely on who sold it to you, and identical hardware carries very different pricing from different sellers. Read who owns the equipment before signing. |
| Geniuswas Vital | $0 / $42 / $129published | 2.6% + 10cpublished | 3 years | Their own footnote requires a three year term, 4% cash discounting and $250,000 a year in volume, and mentions an early termination fee. Their pricing page asks about termination fees and then does not answer it. |
| Shift4 DineWe install this | $29.99per terminal, published | Interchange plusmarkup shown in writing | 36 months | What a rep will not lead with: there is a $250 annual program fee per device, an annual regulatory fee, and a yearly escalator on a 36 month agreement. We put all of it in the quote. What you get is a rate where the processor's margin is visible instead of blended into one number. |
| Lightspeed | $69 / $189 / $399published | 2.4% to 2.6% + 10creported, sources disagree | Month to month or annual | A reported $400 a month penalty applies for using a payment processor other than Lightspeed Payments, which makes their processing effectively mandatory. The published software page never states whether prices are per terminal or per location. |
| TouchBistro | $69 or $119published | Not publishedquote based, partner processors | Sources conflict | One reviewer reports month to month, another reports multi year auto renewing contracts that cannot be terminated early. The add-on stack is where the bill grows: reported $25 to $229 a month per module, and a reported $200 setup fee. |
| SpotOn | $0 or $55per station, published | 2.79% + 20c or 2.45% + 15cpublished | 2 years or monthly | The most published rate card in the category after Square. The fine print: a reported $995 conversion fee plus doubled software cost if you switch processors, and cancelling All-In inside a year claws back the hardware discount. |
Square, Genius, SpotOn, Shift4 and Lightspeed software figures are published by those vendors and were read on their own pages on 8 August 2026. Toast, Clover and TouchBistro figures are reported by Merchant Maverick, Expert Market, POSUSA, NerdWallet, business.com and KORONA POS, cross checked against at least two independent sources where possible and labelled where sources disagree. Software units differ: Square prices per location, Toast and Shift4 per terminal, Clover per device, SpotOn per station. Rates change without notice. General guidance, not legal, tax or accounting advice.
Questions owners ask
Is surcharging legal in my state?
Prohibited in Connecticut, Maine, Massachusetts and Puerto Rico. Permitted with a cap or a disclosure format in Colorado, Kansas, Minnesota, New Jersey, New York and Oklahoma. Permitted in the rest, with the caveat that Texas, Florida and California still carry unenforced or partially enjoined statutes in their codes. Every one of those is cited to its statute in the table above.
Can I surcharge a debit card?
No. Not because federal law forbids it, because it does not, but because both Visa and Mastercard prohibit it in your card acceptance agreement, and Texas prohibits it by statute. This includes a debit card where the customer selects credit at the terminal. Visa answers that question directly in its own published merchant Q and A.
What is the maximum I can charge?
Your own cost of acceptance, never more. On top of that, Visa caps at 3% and Mastercard at 4%. If your effective rate is 2.6%, your maximum surcharge is 2.6%, not 3%. Charging more than cost is a rule violation regardless of which network's ceiling you are under.
Do I have to tell anyone before I start?
Yes. Visa requires at least 30 days notice to your acquirer. Mastercard requires 30 days notice to both Mastercard and your acquirer, and your acquirer has to register you within 10 days of being notified. This is usually filed by your processor, and it is worth confirming in writing that it was.
Is a cash discount just a surcharge with a different name?
Legally they are treated very differently, and the difference is the reference price rather than the vocabulary. The Kansas Revisor's own official comment concedes how thin the distinction is in practice. The mechanics that keep a programme on the right side of it are on the cash discounting and dual pricing page.
Does this page count as legal advice?
No. It is a sourced reference with every statute named so you can read the primary text yourself, and it is current as of 13 August 2026. Surcharge law has moved in four states in the last three years and the card networks revise their rules on their own schedule. Confirm anything that affects your pricing with your own counsel before you build it into a menu.
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