As a business owner, credit card processing fees can feel like a constant drain on your profits. With every swipe, a portion of your hard-earned revenue goes toward paying processing fees, which can be as high as 4% per transaction. It's no wonder many businesses are looking for ways to pass these fees onto customers. But while the concept sounds simple, there’s a lot more involved when it comes to compliance and implementation.
Let’s walk through what’s required to pass on credit card fees to your customers, what concerns you should have, and why dual pricing could be the simple, compliant solution you’ve been looking for.
One of the most common ways businesses try to pass on credit card fees is through surcharging—adding an additional fee to a customer's bill if they choose to pay with a credit card. While this may sound straightforward, there are several hoops to jump through to ensure you're compliant.
Surcharging is not allowed in all states. In states like California, Colorado, Connecticut, Massachusetts, and a few others, surcharging is prohibited. This means if you operate in one of these states, adding a surcharge to credit card transactions could land you in hot water legally. Even if surcharging is legal where you do business, different states have specific rules you need to follow, adding more complexity.
Even if surcharging is legal in your state, you need to follow strict rules set by card networks like Visa and Mastercard. Here are just a few things you must do to stay compliant:
Even if you get the logistics right, there’s still the issue of customer satisfaction. Surcharges can feel like a penalty to customers who prefer the convenience of using credit cards. No one likes feeling like they’re being punished for how they choose to pay. This can hurt your customer relationships and even lead to a drop in sales.
Another option businesses consider is cash discounting. With this approach, you offer customers a discount for paying with cash, check, or debit. The listed price includes the credit card processing fee, and customers who pay with non-card methods receive a discount.
While this can simplify things, cash discounting also has its own compliance rules and concerns. And just like surcharging, you’ll need to adjust your point-of-sale system, train your staff, and ensure you’re following state and card brand regulations. Additionally, presenting prices this way may not appeal to customers who expect the credit card price to be the default and might not like the idea of paying more for using their card.
If surcharging sounds like a hassle and cash discounting seems less than ideal, there’s a simpler option that takes care of everything for you: dual pricing.
Dual pricing allows you to present two prices upfront—one for cash payments and another for credit card payments. It’s a transparent, easy-to-understand model that not only keeps you compliant but also gives customers a choice without feeling penalized.
Here’s why dual pricing is the best option for business owners looking to pass fees onto customers:
Unlike surcharging, dual pricing is fully compliant in all 50 states. You don’t have to worry about state regulations or whether you’re violating any rules. No matter where your business operates, dual pricing is a legally sound option.
Dual pricing also avoids the complex rules set by card networks like Visa and Mastercard. There’s no need to notify your acquirer, no cap on fees, and no additional paperwork. You simply show two prices, and customers choose which they prefer.
With dual pricing, everything is out in the open. Customers know what they’re paying for upfront. They can see both the cash price and the credit card price at checkout, giving them control over how they pay. This transparency helps maintain customer trust and keeps your pricing policies clear and fair.
At Merchant Processing Pros, we make the switch to dual pricing easy. We’ll set up your system so that it’s ready to go without any hassle on your end. From POS integration to staff training, we handle every aspect of the process, ensuring that your business is compliant and ready to pass credit card fees to customers effortlessly.
And here’s the best part: you won’t pay any processing fees. With dual pricing, your customers cover the cost of credit card transactions, leaving you with more profit in your pocket.
Passing credit card fees onto customers can help protect your margins, but as you’ve seen, there are many steps to ensure compliance when it comes to surcharging or cash discounting. From state regulations to card network requirements, the process can quickly become a lot of work for busy business owners.
That’s why dual pricing is the smartest choice. It’s fully compliant, transparent, and simple—and with Merchant Processing Pros, we’ll take care of everything for you. You get to keep more of your hard-earned money without worrying about compliance issues or extra fees.
Ready to Simplify Your Payment Processing?
If you’re tired of paying credit card fees and want a simple, compliant solution, contact Merchant Processing Pros today.
We’ll help you set up a dual pricing program that’s hassle-free and compliant in all 50 states.