Yes and No ...
There are costs to doing business either online or in person - one in particular is the credit card processing fee. So who gets to pay this fee ? Some businesses just absorb the fee and move on and other businesses feel the customer should. What's your thoughts .... personally, if a business feels I should pay their processing fees, I won't deal with them. Most likely, I'm already paying too much.
There are ways to deal with this additional cost. You can simply raise the cost of your item and the customer is not aware or you can add a separate line item to the purchase (surcharge or handling fee) however, this will be questioned. It's your choice. Note, if you are adding a separate line item for this cost, you must let the buyer or customer know this ahead of time, else you will end up in an uncomfortable scenario.
Now there is the legal issue of adding a "surcharge or credit card processing fee". It's legal in most states but, not all. Best to contact the card issuers (MasterCard or Visa) in your state to ensure what you want to do is OK.
Case in point:
Colorado was one of just three states that banned merchants from adding surcharges to credit card transactions. Through a law enacted in July 2021 that takes effect on July 1, 2022, Colorado has lifted the ban and will be the 48th state to allow surcharging. Connecticut and Massachusetts remain the only states to prohibit the practice.
Most states that have enacted similar bans have been mostly passive in their approach to permitting surcharges—meaning they default to Visa and Mastercard rules to determine surcharging practices in the state. Colorado has taken a proactive role in dictating the state’s surcharging rules, establishing some strict guidelines for merchants.
Here are some of the surcharging rules that Colorado will require of merchants:
No differentiating between fees and surcharges: Under the new law, any charges beyond the cost of the goods or services sold are considered a surcharge. That includes convenience fees, service fees, and surcharges. Surcharges are now defined as “any additional amount imposed at the time of the sale or lease transaction…for the privilege of using a credit or charge card.” That means all additional fees are subject to the same rule.
Surcharges limited to 2%: Under the new law, surcharges, which now include any additional fees, are limited to 2% of the amount of the sale or what the merchant actually pays to the payment processor. That’s in contrast to Visa and Mastercard surcharge caps of 4% or the merchant discount rate, whichever is less. So, it’s conceivable that a merchant can exceed the 2% cap if the payment processing fee is higher.
No surcharges on debit cards: Card brands have a much more restrictive approach to debit card surcharges versus credit card surcharges. According to card brand regulations, merchants are not permitted to add any fees to transactions made with debit cards or gift cards.
Greater transparency required: The Colorado law mandates that merchants use specific language to disclose surcharges, whether at a physical site or an e-commerce site. In addition, any surcharge must be included as a line item on the receipt. Also, no more than one surcharge may be assessed per transaction.
Law will be enforced through criminal prosecution: Merchants who willfully violate the new law can be prosecuted under the Consumer Credit Code. The code provides several penalties for violations, the most serious of which is prosecution for criminal misdemeanor.
The lifting of the surcharge ban in Colorado acknowledges two realities in the credit payments arena: Banning surcharges has proven to be a costly and losing battle. States are caving to the pressure of litigation brought about by trade groups and retail advocacy groups.
Credit card processing fees represent a real cost to merchants.
Under Colorado’s law, as it is with other state laws, merchants are not required to add a surcharge but have the right to do so. In the case of Colorado’s law, the limitations on how surcharges may be applied and potential conflicts with the card brand rules require that merchants be especially careful when implementing a surcharge program.
This is just one example for one State - best advice - do YOUR HOMEWORK before you implement your policy.
jk
