Several U.S. states have laws banning or restricting credit card surcharges. To ensure compliance, merchants should regularly monitor the relevant state laws, which are subject to change. While most merchants selling a product or service delivered or used in the state where they are doing business do not need to be concerned about the state of residence of the cardholder making a purchase, certain merchants using Card Not Present (CNP) transactions to sell and then ship items to cardholders located in other states may be considered by the resident states of the cardholder to be “doing business” in those states.
Merchants should consult counsel to determine whether their transactions might be determined to be taking place in the cardholder’s resident state and whether the merchant might have a sufficient nexus to such states to be subject to the jurisdiction of those states.
If merchants are concerned with potentially breaching the surcharging laws of states where their customers reside, PayJunction’s Virtual Terminal offers merchants a way to disable surcharging for CNP transactions based on the billing ZIP code associated with the cardholder.
If you have additional questions, you can call PayJunction Support at 800-601-0230 option 3.
For more information about CNP transactions and surcharging, please visit:
Credit Card Surcharge Laws by State: Considerations for Merchants