Shopmonkey Payments: Surcharging FAQs

Surcharging is the practice of adding a fee to a customer's bill when they pay using a credit card. This fee helps merchants cover the costs associated with processing credit card payments.

Surcharging on debit and prepaid cards is prohibited by the card brands (e.g., Visa and Mastercard) for all U.S. merchants. You cannot add a credit card surcharge to a debit or prepaid card. There are no exceptions to this rule.

Running debit and prepaid cards as “credit”, whether with a PIN or not, does not change the fact that these cards are debit and prepaid cards. That means the surcharge is still non-compliant. Surcharging on debit and prepaid cards is prohibited for all U.S. merchants, regardless of how they are processed.

No. Surcharging is only allowed on credit card transactions. Because Buy Now, Pay-Over-Time transactions cannot be paid with a credit card, it there is no situation where surcharging is possible on a Buy Now Pay-Over-Time transaction. It is not legal to surcharge on Buy Now, Pay-Over-Time transactions.

Yes, surcharging is regulated by national laws, state-specific laws, and rules set by credit card networks like Visa and Mastercard. This makes the regulatory landscape complex and non-uniform.

Visa: Visa Merchant Surcharging Q&A

Mastercard: Mastercard Surcharge FAQ

Most states allow surcharging without additional requirements. If a state is not specifically listed as prohibiting or regulating surcharging, it falls into this category. It is your responsibility to ensure that you remain compliant when surcharging.

Colorado allows surcharging, but they do not allow the surcharge to exceed 2%. Additional requirements for surcharging may exist in other states. You are responsible for ensuring that you meet your shop’s state requirements.

Yes. There is a 30-day waiting period after the request to start surcharging.

The surcharge fee is a per-transaction fee. When issuing refunds, it is suggested to prorate the surcharge fee to avoid complexity.

Yes, shops can set their surcharging rates up to 3.0%. However, the rate must not exceed the cost of processing the credit card transaction, as this would be against surcharging regulations.

Shops using Interchange Plus pricing can also implement surcharging. However, due to the variability of interchange fees, you must set appropriate surcharge rates to avoid overcharging customers and violating regulations.

Surcharging can be set up under the General Settings section of Shopmonkey.

Display notifications about surcharging at both the point of entry (e.g., a window or door) and the point of sale. This ensures customers are aware of the additional fee before they make a purchase.

The surcharge fee will be displayed during the payment process, showing both the original price and the new total including the surcharge. This is applicable only for credit card transactions and not for debit cards or other payment methods.

For state-specific regulations, contact your local consumer protection agency. For credit card network rules, refer to these Visa and Mastercard surcharging FAQ documents.

Visa: Visa Merchant Surcharging Q&A

Mastercard: Mastercard Surcharge FAQ

Surcharging rules in the United States are governed by both national regulations from card brands like Visa and Mastercard, and state-specific laws. Merchants must comply with both to ensure they are legally surcharging their customers.

No. Connecticut, Maine, Massachusetts, New York, Oklahoma, and Puerto Rico prohibit surcharging. Colorado allows it but surcharges cannot exceed 2%.

The card brands (e.g., Visa, Mastercard) can impose fines of up to tens of thousands of dollars for non-compliance with their rules regarding surcharging. They can even prevent you from accepting their brand’s cards entirely as a payment method.

You are responsible for any fines or penalties that you receive as a result of non-compliant surcharging or any other non-compliant practices. It is important to know the card brand rules, as well as your state and local laws, to ensure that you stay protected from any fines or penalties.

When a customer goes to pay an online invoice they will see both the debit card price and the credit card price with the surcharge fee added.

No, the surcharge rate must be consistent for all credit card transactions. Differentiating surcharge rates between card types is not compliant with card brand rules.

When processing a refund, the surcharge amount with full refunds or prorated amount with partial refunds must be refunded as well to adhere to compliance rules.

No. Manual removal of surcharges for select transactions is not possible to ensure compliance.

Non-compliance with signage requirements can result in fines and penalties from card brands. Proper signage is crucial to ensure transparency and inform customers about the surcharge.

Generally, yes. However, surcharges up to 2% are not subject to sales tax in Colorado. Consult a tax advisor for specific tax questions.

Surcharging is available on a location-by-location basis, so any eligible locations are permitted to surcharge. Locations in ineligible states will not be allowed to surcharge despite their parent/sibling locations existing in eligible states.

Yes. The portion of the bill that is paid with a credit card will be surcharged, and the portion paid with a debit card, cash, or gift card will not be surcharged.