The Changing Face of Credit Card Surcharging

As businesses continue to feel the pain of the COVID-19 pandemic, merchants in Kansas are breathing a sigh of relief. This is because recently a state law that banned surcharging in Kansas was declared unconstitutional. This means that business owners can now legally share their processing fees with their customers by adding a surcharge to purchases made with a credit card. 

The ruling in Kansas continues the trend of reversals, judgments, and opinions issued by state courts in favor of surcharging. There are now only five states with surcharging bans in effect: Colorado, Connecticut, Maine, Massachusetts, and Oklahoma. This is why many payments industry experts think it’s only a matter of time before surcharging is allowed in all fifty states. The Attorney General of Oklahoma even publicly echoed that sentiment by saying that he thinks the ban on surcharging will eventually fall. 

It has been interesting to see how states handle this topic. Those who still oppose surcharging appear to be taking cues from neighboring states. Take for example the state of New York. In 2019, surcharging became legal as long as businesses made the required additional disclosures, which meant posting and verbally quoting the card price and the cash price. States located nearby that still prohibit surcharging have signaled that they will most likely follow New York law when their surcharging bans are challenged. 

This is not the first time surcharging has made the news in Kansas. In fact, it was just over a year ago that the Sedgwick County District Attorney’s office ordered the owner of Riverside Cafe to pay a $60,000 settlement for charging customers a 4% surcharge, which at the time was illegal under the Kansas Consumer Protection Act. It’s interesting how much things can change in a year.

These changes come at a time when many business owners are closely keeping tabs on expenses and are actively looking for ways to save money. In most states adding a surcharge is perfectly legal, but as you can see, enhanced pricing programs, like surcharging, are highly regulated by the card brands and state governments. Plus, the regulations are constantly evolving. 

This is why if you plan to implement pricing programs like surcharging, cash discounting, convenience fees, and the like, you need to make sure you have a provider you can trust. There are many other stories about businesses just like Riverside Cafe. They trusted their payments provider and followed their advice to surcharge credit card transactions. They even displayed signage to make customers aware of the fee, but in the end, they still weren’t following the letter of the law.

The potential for savings with these programs is huge. On average, our customers who participate in the Empower Program save $9,500 a year. That’s significant in any economy, but especially as many businesses anxiously await the day when COVID-19 doesn’t pose such a serious threat to our nation and our world. 

As a member of COCARD you have access to processors like Clearent as well as information, and insight into the payments industry. For more information about becoming a member of COCARD contact our office at 800-882-1352 or email


Phil Ricci

Phil Ricci

Phil has been working in the financial services and payments industry for many years and has held a variety of roles throughout his career prior to joining Clearent. Originally brought on as the Vice President of the Mid Atlantic Region, he currently serves as the Vice President of Sales Operations. Phil resides in Farmington, New York with his wife and three children.