You Decided to Surcharge. Here Are the 7 Mistakes That Still Get Merchants Fined

How Do Surcharge Fines Actually Work?

Visa doesn’t fine you directly. It assesses your acquiring bank, and your merchant agreement almost certainly lets the bank pass the fine to you. Violations are usually found through cardholder complaints and audits, including test purchases. Under the escalation schedule Visa adopted in April 2023:

The lesson is speed. A $1,000 problem fixed in a week stays a $1,000 problem. Processors have also reported that recent enforcement has reached cash discount and dual pricing programs, not just surcharges. Expect to refund customers who were overcharged, too.

What Are the Most Common Surcharge Mistakes?

Mistake 1: Calling a surcharge something else

Card networks look at how a fee works, not what it’s called. If card customers pay more than cash customers because of a fee added at checkout, it’s a surcharge, whether you call it a “service fee,” “non-cash adjustment” or “processing fee.” Real dual pricing posts the card price up front and gives cash payers a discount. Real service fees are limited to eligible government, education and utility merchants registered in a network program.

Fix: Classify your program honestly, then follow that program’s rules. Our comparison of surcharging, dual pricing, convenience fees and service fees explains the differences.

Mistake 2: Surcharging debit cards by accident

Debit and prepaid cards can never be surcharged, even when a customer presses “credit” at the terminal. Accidental debit surcharges usually come from equipment that doesn’t identify the card type, manually keyed payments, or a software update that reset a setting. Texas, Maine and Louisiana add their own state bans on top of the network rule.

Fix: Use a system that detects debit and prepaid cards automatically and removes the surcharge. Test it with a real debit card every quarter and after every software update.

Mistake 3: Charging more than your actual cost

A flat 3% surcharge is common and often wrong. Your surcharge can’t exceed what it actually costs you to accept the card, and that cost changes as your card mix and pricing change. Visa caps surcharges at 3% and Mastercard at 4%. Oklahoma caps them at 2% or your cost, whichever is less, and Colorado lets you use either a 2% cap or a cap equal to your actual processing cost.

Fix: Calculate your effective credit card cost from recent statements. Recheck it at least once a year and whenever your pricing changes.

Mistake 4: Skipping the notice and signage

Visa requires notice to your processor at least 30 days before you start, and Mastercard requires advance notice as well. Customers must see the surcharge at the store entrance or website entry, again at checkout before they pay, and as its own line on the receipt. Missing signs are one of the easiest violations for a test buyer to find.

Fix: Keep a copy of your notice to your processor, and photograph your signs and checkout screens. If a store remodels or your website changes, check them again.

Mistake 5: Ignoring the American Express conflict

American Express’s merchant rules require equal treatment across the payment products you accept, including debit. Visa and Mastercard rules ban surcharging debit. You can’t follow both rules to the letter if you surcharge Amex, and the conflict hasn’t been resolved.

Fix: Decide on purpose, not by default. Your options are to surcharge no cards, to use dual pricing instead, or to surcharge credit only after getting written guidance from your processor on how it handles American Express. Don’t guess.

Mistake 6: Surcharging where the rules changed

State rules moved a lot in the last 12 months, and online sales can reach customers in states you don’t think about. Surcharging is banned for private businesses in Connecticut, Maine, Massachusetts and Puerto Rico. Oklahoma began allowing surcharges, with a 2% cap, on November 1, 2025. Colorado’s total-price law took effect January 1, 2026. Louisiana banned debit surcharges on August 1, 2026. Texas has a ban on the books whose enforceability is disputed. New York, California and Minnesota add price display rules.

Fix: Check every state you sell into, not just where you’re based. Our state-by-state surcharge guide is updated as laws change.

Mistake 7: Treating compliance as a one-time setup

Programs drift. New staff don’t know the rules, refunds don’t return the surcharge, a price list gets reprinted without the card price, or a new location opens without signs. When you refund a surcharged sale, the surcharge should be refunded in proportion to the amount returned. Rules also keep changing: if the pending Visa and Mastercard settlement becomes final, it would allow surcharging by brand or by card type, which would bring new setup decisions.

Fix: Put a quarterly compliance check on the calendar, using the checklist below, and assign someone to own it.

Quarterly Surcharge Compliance Checklist

• ☐  Our program is correctly classified as a surcharge, dual pricing, convenience fee or service fee.
• ☐  Surcharging is allowed in every state where we sell, and we follow each state’s caps and display rules.
• ☐  We have a copy of our notice to our processor.
• ☐  A test debit card and a test prepaid card were not surcharged this quarter.
• ☐  Our surcharge rate is at or below our current cost of acceptance and every applicable cap.
• ☐  Signs are posted at every entrance and checkout, and the online checkout shows the surcharge before payment.
• ☐  Receipts show the surcharge as a separate line.
• ☐  Refunds return the surcharge in proportion to the amount refunded.
• ☐  Staff who take payments were trained this year, and we have a written decision on American Express.

Where IntelliPay Fits

IntelliPay supports surcharge, dual pricing, convenience fee and service fee programs, with transparent interchange-plus pricing and no junk fees. Our surcharge setup is built to card network rules, including automatic handling of debit and prepaid cards and separate receipt lines.

We can’t tell you whether a fee is legal for your business, or resolve the American Express conflict for you. Those are questions for your attorney. But we’ll walk through your setup with you, line by line.

Frequently Asked Questions

Suggested Reading

Sources

• ArentFox Schiff, Visa Reduces Its Merchant Surcharge Cap to 3% Effective April 15, 2023 (Visa non-compliance assessment schedule)
• CCG, Visa Enforcement on Non-Compliant Pricing Programs (processor compliance alert)
• FIS, Merchant Surcharging Guide (American Express equal treatment rule)
• Payments Dive, How Amex is entangled in the Visa-Mastercard settlement
• Maine Bureau of Consumer Credit Protection, Credit and Debit Card Surcharges
• Justia, Texas Business and Commerce Code §604A.0021
• Oklahoma Legislature, Enrolled Senate Bill 677 (effective November 1, 2025)
• Merchant Marvels, Is Surcharging Legal in Your State? A 2026 State-by-State Guide (Louisiana Act 751)
• ABA Banking Journal, First Circuit rules federal law does not preempt Puerto Rico’s credit card surcharge law (2025)
• Payments Dive, Court approves Visa-Mastercard settlement (June 2026)