Across the country, merchants are being hit with four- and five-figure fines for supposed “violations” of surcharging or dual pricing rules, often with little to no explanation of what went wrong or how to fix it. In this post, we’ll unpack what’s really happening behind these assessments, where most merchants go wrong, and what you can do right now to stay out of the crosshairs.
The Problem: Fines Without Findings
When card brand or acquirer letters arrive without clear findings or remediation steps, everyone loses. There is panic and scrambling across the payment infrastructure.
These “fines without findings” create a dangerous compliance gray zone:
- No clear violations listed – only a vague “non-compliance” statement
- No actionable next steps – leaving merchants unsure how to correct issues
- Escalating penalties – fees compound when the “problem” isn’t even defined
At Clarity EPS we believe the fix starts with Clarity and consistency.
The Three Pricing Models – Done Right
It starts with understanding the three main pricing models available to business owners that help offset or eliminate their card processing fees, the differences, and separating them to avoid violations:
- Surcharging – Added only on credit card transactions and usually capped at 3%
- Cash Discounting – The posted price is the card price; customers get a discount for paying cash.
- Dual Pricing – Two posted prices – one for cash and one for card that is clearly displayed.
Most violations happen when these models get blended or misapplied such as when adding a flat fee to all transactions (including debit), which can trigger brand violations or legal exposure.
The #1 Confusion
If a consumer were to Google “can a business charge a debit card fee” the response would be no, but only because they are referring to the surcharge program. That is due to the fact that under the dual pricing model there is a card and cash price, a completely different program As a result, consumers visiting a business on the dual pricing program may claim the business is not allowed to charge their debit card. This only causes confusion for the business owner.
The fix:
- For dual pricing ensure proper signage is posted showing a card and cash price is offered for all goods and service
- For surcharging, ensure proper signage states that a 3% surcharge will be added to all Credit cards transactions
- Ensure all business owners and staff understand the difference between the two programs
Signage, Receipts, and “Conspicuous Disclosure”
Many fines are triggered not by pricing errors but due to improper disclosure.
To comply, merchants must display notices:
- At entry points (doors or windows)
- At checkout counters or terminals
- On menus or price displays (for restaurants or retail)
- On printed and emailed receipts
Depending on the business, “Register-only” signs don’t meet the standard as customers must be informed before deciding how to pay.
State Law vs. Brand Rules
Even if a merchant follows Visa or Mastercard’s brand caps, state laws can impose stricter requirements. When there’s a conflict, the stricter rule wins, meaning merchants in states like New York or New Jersey must comply with both brand disclosure rules and local advertising laws.
Due Process and Escalation
Many merchants don’t challenge fines because they fear reprisal or termination; however, due process exists, and documentation is your best defense.
When a notice arrives:
- Contact your processor immediately
- Gather photos, receipts, and POS settings, if applicable.
- Map each allegation to the specific rule text.
- Correct the issue and respond within the allotted time fram.
- Retain all records for potential appeal.
The Bottom Line
Business owners need to fully understand the programs available to them that will help either offset or eliminate their card processing fees. Its starts with finding the right partner, one who is able to properly educate a business owner of the programs and their rights.
For the last 22+ years, Clarity EPS has been educating business owners on the programs and how they work, empowering them to make the right decision for them. Why?
Because Clarity isn’t just compliance, it’s how you build trust, prevent penalties, and preserve long-term relationships.