Can Florida merchants add a surcharge to customers using a credit card?

As a small business or merchant, it can sometimes be frustrating when customers or clients ask if you accept credit cards because the fee charged by credit card companies comes straight off your bottom line. These “swipe” or “interchange” fees are calculated as a percentage of the amount purchased and add up on travel cards that award high points for their use.

What is a credit card surcharge?

Surcharging is adding a fee to a credit card transaction to cover the credit card company’s processing cost charged to the business. Instead of the merchant absorbing this expense, the customer, using the credit card, pays for the processing costs that do not apply to other payment methods.

How is this different from a cash discount?

Cash discounting is when the customer receives a discount equivalent to the cost of credit card processing when paying with cash, check, or a debit card. You might have noticed this at your local convenience store when purchasing gas.

Are credit card surcharges legal?

Merchants in Florida may add a surcharge to credit card purchases, but some states still prohibit them. Florida Statute 501.0117 prohibits a seller or lessor from imposing a surcharge on transactions paid with a credit card. However, Federal courts held that the law is unconstitutional, so surcharges are allowed in Florida.

Can businesses charge whatever amount they want as a surcharge?

Major credit card companies have rules that limit the amount a merchant can add to a credit card purchase. A business is typically limited to charging no more than their actual cost for processing the credit card purchase.

Are businesses required to disclose credit card surcharges to their customers?

Credit card surcharges must be disclosed before the purchase occurs. Most credit card companies require merchants to disclose credit card surcharges in online transactions, using a sign at the store’s entrance, at the cash register, and on the receipt. Any undisclosed fees may constitute an unfair or deceptive trade practice, which is prohibited under Florida law.

Can businesses charge a surcharge on debit card transactions?

Restrictions under the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act deal specifically with debit transactions and limit imposing surcharges on prepaid or debit cards. This restriction even applies to transactions processed using “signature debit,” sometimes called “running a card as a credit card.” Click here for a link to the Florida Attorney General’s Consumer Protection page on this subject.