Passing card costs to the customer is legal in most of the United States, and the rules that govern it come from three places at once: state law, card network rules and your own merchant agreement. Breaking any one of them can cost you the ability to accept cards.
Three models that are not the same thing
| Model | How it is presented | Applies to |
|---|---|---|
| Surcharge | Listed price, then a fee added at checkout for credit cards | Credit cards only, never debit or prepaid |
| Cash discount | One higher listed price, reduced for cash or bank payment | All payment methods |
| Dual pricing | Two prices displayed side by side throughout | All payment methods |
The distinction is not cosmetic. A surcharge is regulated by the networks and must be registered. A properly built cash discount programme, where the displayed price is the card price and cash buyers pay less, sits outside most of those rules. Many providers sell a surcharge programme labelled as cash discount, which leaves the merchant carrying the compliance risk.
The network rules for surcharging
- Notify the card networks and your acquirer at least thirty days before you start.
- Never surcharge debit or prepaid cards, even when they run as credit.
- Cap the surcharge at your actual cost of acceptance, and never above the network ceiling of three percent.
- Disclose at the entrance to the checkout and again at the point of payment, and show the amount as a separate line on the receipt.
- Apply it consistently. You cannot surcharge one brand and not another where both are accepted on the same terms.
- Refund the surcharge proportionally when you refund the sale.
State law, in outline
Most states permit surcharging. A small number restrict or prohibit it, and the position in Connecticut, Massachusetts and Puerto Rico has been the most restrictive for years, while several other state bans have been struck down or narrowed by courts. Some states, including New York and California, focus on how the price must be displayed rather than whether a surcharge is allowed at all: the total price a card customer pays must be shown, not a percentage the customer has to calculate.
Because this area moves, treat any list as a starting point and confirm the current position for the states you actually sell into before switching it on. Nothing here is legal advice.
What it does to your numbers
The obvious gain is the fee. The less obvious costs are a measurable drop in checkout completion, more customer service contacts, and a rise in disputes when the line item is a surprise. Stores that succeed with it tend to share three traits: high average order values, a B2B customer base that expects it, and a clear alternative such as bank payment on the same page.
Doing it cleanly in WooCommerce
- Detect the card type before the fee is applied, so debit never carries a surcharge.
- Show the fee as its own line in the cart, the order confirmation and the receipt email.
- Keep the fee out of the tax base unless your jurisdiction says otherwise, and take advice on that point.
- Refund the fee automatically on a full refund, and proportionally on a partial one.
- Offer a fee free method, usually ACH, next to it. That single change removes most of the complaints.
The surcharge and cash discount page shows the settings side of this.