Let’s talk about something that confuses a lot of business owners: how to avoid paying credit card fees. As a business owner you are acutely aware that every time a customer swipes their card or you manually enter in a transaction, you’re paying a percentage of that sale to Visa, Mastercard and the card issuing bank. It’s frustrating, and a lot of businesses want to offset that cost by simply adding a fee to credit card transactions.
But here’s the thing—you can’t just slap a fee on a card transaction and pocket the difference. That’s a violation of Visa and Mastercard’s rules, and if you get caught (which happens more often than you’d think), the consequences can be expensive. Let’s break it down.
The Credit Card Rules You Need to Know
Visa and Mastercard (along with other card networks) have strict rules about how businesses handle credit card transactions. One of the big no-nos? Manually adding a fee to a transaction and keeping the money yourself. That’s why Visa and MasterCard offer compliant solutions – surcharging and dual processing.
- Surcharging – Visa and Mastercard allow businesses to add a surcharge only if they follow very specific rules. You must:
- Register with Visa and Mastercard in advance (we take care of that for you)
- Clearly disclose the surcharge to customers before they pay.
- Not charge more than what you actually pay in processing fees.
- Apply the surcharge only to credit cards—not debit cards or prepaid cards.
- Use proper receipts that show the fee separately.
- Post the required signage in a visible location that clearly informs customers of the surcharge.
- You Can’t Just Pocket the Fee – If you do add a surcharge, it’s not extra profit—it must go directly to covering processing costs and be collected by the processor.
- Some States Restrict It – While credit card surcharges are allowed in most states, some (like Connecticut and Massachusetts) still prohibit them. If you operate in one of these states and charge a fee, you could face legal trouble
Required Signage for Surcharging:
If your business applies a surcharge, you must display a sign that states:
👉 “A 3% surcharge will be added to all credit card transactions. However, there is no fee for debit card transactions.”
The Right Way to Offset Processing Fees: Dual Pricing
Many businesses are turning to dual pricing, which is a fully compliant way to handle credit card processing costs without violating Visa/Mastercard regulations.
What Is Dual Pricing?
Dual pricing means listing two different prices:
- A lower price for customers who pay with cash
- A slightly higher price for customers who pay with a credit card
With this model, there’s no separate “fee” being added at checkout—the customer simply chooses which price they want to pay. Unlike illegal surcharging, dual pricing is structured within the pricing model, making it compliant with card network rules.
Required Signage for Dual Pricing
To remain compliant, businesses that use dual pricing must clearly notify customers with a sign that reads:
👉 “We now offer both a card and cash price for all goods and services.”
This sign should be posted at the entrance and at the point of sale so customers are aware of the pricing structure before they make a payment.
Why Dual Pricing Is a Better Alternative
✅ It’s 100% Compliant – Dual pricing follows Visa/Mastercard guidelines and doesn’t require special registration and is allowed in all 50 states.
✅ No Surprise Fees for Customers – Pricing is transparent from the start, so customers don’t feel like they’re getting hit with an unexpected charge.
✅ No Risk of Fines or Secret Shopper Penalties – Since dual pricing doesn’t violate card network rules, your business won’t get in trouble if a Visa secret shopper walks in.
Visa’s Secret Shoppers Are Watching
Think you won’t get caught if you add a manual credit card fee? Think again. Visa and Mastercard actively enforce their rules through mystery shopping programs. They send secret shoppers to businesses across the country to see if they’re complying with the rules.
If a secret shopper catches you improperly charging a fee, you could face:
🚨 Hefty financial penalties—fines can range from thousands to tens of thousands of dollars.
🚨 Potential loss of your ability to accept credit cards—which, let’s be honest, could be a business-killer.
🚨 Chargebacks and customer complaints—especially if customers feel misled about the extra fees.
How to Stay Compliant and Save Money
If you’re looking for a legit, rule-following way to offset credit card processing costs, here’s what you should do:
✔ Implement a Dual Pricing Model – Work with a processor that sets up compliant dual pricing so you can avoid fines and still cover costs.
✔ Follow Proper Surcharge Rules – If you prefer surcharging, make sure you register with Visa/Mastercard, post the correct signage, and comply with all their requirements.
✔ Adjust Your Pricing Strategy – Some businesses simply increase overall pricing slightly so that all customers, whether they pay with cash or card, contribute to covering processing fees.
Final Thoughts
Credit card processing fees are frustrating, but breaking the rules isn’t worth the risk. Visa and Mastercard take compliance seriously, and their secret shoppers will catch businesses that try to manually add a credit card fee.
If you’re looking for a legal way to manage these costs, dual pricing is the way to go—it keeps you compliant while giving customers the option to pay how they prefer.
And remember: if you’re surcharging or using dual pricing, you must display the correct signage—that’s not optional!
Have questions about how to legally and compliantly manage credit card fees? Let’s chat.