As a business owner, you understand that there is a cost associated with accepting credit cards. Rather than absorb these costs, some merchants are choosing to pass these fees to their customers in the form of a surcharge. A surcharge is an extra fee that is added to a customer’s bill when they pay using a credit card. Surcharges are also known as “checkout fees”. Surcharges are intended to cover the additional costs associated when customers pay with a credit card rather than using another form of payment.

Some merchants may confuse cash discounting with surcharging. They are not the same. Cash discount refers to a reduction from the listed price when a customer chooses to pay with cash. A surcharge is a fee added to the listed price when a customer pays with a credit card. The difference is subtle, but the rules and regulations for each method are very different. 

Credit card surcharging has gained popularity in the last several years and legal changes have removed some of the barriers. The practice of surcharging may sound like an attractive proposition, but surcharging comes with a long list of considerations. In the rest of this article, we will be reviewing the top 12 items you should understand before implementing a surcharge program.