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Credit Card Surcharge Program: Guide for Merchants

If you're looking to introduce a credit card surcharge to your customers, you need to be aware of rules and regulations you must abide by. This article provides an overview of the process and regulations to be followed in order to be eligible for the credit surcharge program. Please note, this article is not legal advice, and it is your responsibility to review, understand and comply with surcharging regulations and payment networks' surcharging rules for notification timeframes, signage templates, percentage limits, and surcharging prohibited jurisdictions. If you are unsure about the laws and regulations applicable to credit card surcharging, consult with your local counsel. GoDaddy shall have no liability relating to your compliance with surcharging rules and regulations.

Note: The Point of Sale Plus plan is required to enable credit card surcharging, and includes a range of additional features such as lower transaction fees, unlimited SKUs and inventory management on your POS device, and more.
  1. Notifying the Card Network: Firstly, before you can apply for a credit card surcharge, you're required to notify the card network or acquirer of your intentions. This can be done by filling out a notification form provided by the network and submitting it to them.

    The notification must be submitted at least 30 days prior to implementing any surcharges. We have gathered the previously noted network notification forms and linked them here for ease of use: 
  2. Transparent Communication: Card networks, including Visa, Mastercard, Discover, and American Express, stipulate that merchants should be clear and transparent about the application of a surcharge on credit card transactions. This means signage must be posted in your physical store, on your website, at your point of entry, and at your point of sale terminal/register disclosing to all customers that you apply a surcharge on credit card transactions.
  3. Surcharge Limits: Surcharges must adhere to limits required by network rules or by applicable law. You cannot charge an amount that exceeds your processing fees with GoDaddy, and it must not surpass 3% of the total transaction amount. This is a critical factor to consider when deciding the surcharge amount.
    Warning: Below is an overview of credit surcharging rules in the US. You have an obligation to be aware of the credit surcharging rules and to comply with them.
    • The credit card networks (such as Visa and Mastercard) have guidelines on surcharging. These include surcharge limits and notification requirements.
    • In addition, several US states (and territories) have rules and regulations governing credit surcharging. For instance, the states of Connecticut, Maine, and Massachusetts and the territory of Puerto Rico currently prohibit credit surcharging.
    • Also, the states of Colorado, Minnesota, Mississippi, New Jersey and New York impose restrictions on the amount of a credit surcharge and require specific disclosure when applying a credit surcharge.
    • If you are located in any of the states that prohibit or restrict credit surcharging, please ensure that you understand your state’s rules prior to implementing credit surcharging.
    • Finally, credit surcharges may not be applied to debit card transactions, even if the debit card was processed as a credit transaction.

    This overview is provided for informational purposes only. It is not intended to provide legal advice or to address all circumstances that may arise.

  4. Applicability: It's crucial to note that surcharges can only be applied to credit card transactions, and these must be in-person transactions. Other forms of payments or transactions are not eligible for a surcharge under this program.
  5. Regulatory Compliance: Lastly, always ensure that your business complies with all card networks' surcharging rules. This includes following notification timeframes, using approved signage templates, respecting percentage limits, and adhering to restrictions regarding the jurisdictions where surcharging is prohibited.

    By adhering to these rules, merchants can implement a surcharge that aligns with the policies of the card networks and the expectations of their customers. As you undertake this process, keep in mind the principle of transparency, as clear communication about surcharges can help maintain trust between you and your customers, thereby promoting a healthy business relationship.

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