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How do I add a surcharge to my transactions?

What is a surcharge?

A program that can help Businesses to save money by passing the majority of credit card acceptance costs to the customer as a surcharge fee.

To enable this option on your PayJunction account, please contact our customer support department at support@payjunction.com, or 800-601-0230 x 3.

Considerations for Merchants

Before choosing to surcharge, merchants may want to consider a number of factors, including:

  • The potential impact on your customers' experience.
  • What your competitors might be doing.
  • What information must be disclosed to your customers, and how.
  • Cost of credit cards and other forms of payment.
  • Potential shifts in the forms of payment used by customers.

Rules for Merchants

Summary

Merchants who choose to surcharge must:

  • Merchants must notify PayJunction 30 days prior to beginning to surcharge.
  • Merchant must sign a Surcharging Amendment to their PayJunction Merchant Agreement.
  • The surcharge must be equal to, or less than, the average percentage rate that the merchant pays per transaction, not to exceed a maximum of 3%.
  • Surcharging is only allowed for Credit Card transactions.
  • Surcharging must NOT be charged on debit cards, prepaid cards, FSA/HSA/Flex cards.
  • Businesses MUST clearly disclose the Surcharge:
    • At the point-of-entry (at the entrance of the business).
    • At the point-of-sale (at the register and/or website) with the percentage of the Surcharge.
    • On every receipt with the exact dollar amount of the Surcharge.
    • Including a statement that the merchant is assessing the Surcharge and that the Surcharge is only applicable to credit transactions.
  • The Surcharge amount can be fixed or variable, but it must be charged the same on all card brands and all payment channels.
  • The cardholder must be given the opportunity to cancel the transaction without penalty after the Surcharge is disclosed.
  • A Surcharge cannot be charged in conjunction with a Service Fee or a Convenience Fee.

State and Local Laws

In the United States, surcharging laws vary by state: some have no laws prohibiting surcharging, whereas others ban or restrict businesses from charging it. This Visa website provides additional details on surcharging restrictions in certain states. Merchants must carefully review and follow all state and local laws regarding surcharging in the places where they are located and sell. Sales tax cannot be surcharged in most states. Merchants may wish to consult with legal counsel for surcharging advice specific to their circumstances.

Card Association Rules

If a merchant already has a direct relationship with American Express (ESA#), they will NOT be able to continue accepting American Express and surcharge their customers.

Merchants should carefully review** the Card Association rules governing surcharging before choosing which Card Associations to accept and surcharge to avoid any compliance violations. All of the Card Associations have rules that restrict a merchant's ability to surcharge, with American Express having the most restrictive rules and actively discouraging any surcharging.

Note as of February 2024: The maximum surcharge amount for Visa is 3%, Discover and Mastercard are 4%, and American Express OptBlue is 3.5%. The rule requires parity across all card brands. Therefore, the max amount of 3% must be utilized.

Non-Compliance 

Failure to follow the Card Association Rules and/or state and local laws regarding surcharging applicable to a Merchant can result in non-compliance violations. Businesses that are reported for non-compliance will be contacted via U.S. mail and/or email. The letter will contain a brief description of the violation as well as details around the rule. Once received, this letter must be returned within 7 calendar days acknowledging the violation and describing the steps being taken for compliance.

Effective April 14, 2023, Visa will implement a $1,000 non-compliance assessment for a first time violation offense. It is imperative to ensure compliance in order to mitigate the risk of receiving a non-compliance assessment. If the non-compliance issue is not addressed and/or found to continue, non-compliance assessments for subsequent violations could start at $25,000 depending upon the type of violation. Continued non-compliance could result in increased penalties and lead to termination of your merchant agreement.