As a merchant, the decisions of the Supreme Court likely aren’t top of mind as you go about your day-to-day. Like most owners and operators, you’re busy working on your business, ensuring that your customers are happy and your company is poised for success.
That being said, certain Supreme Court rulings can affect your daily (business) life, so it’s worth being aware of the bills and laws that could impact your operations. Surcharging bills and laws directly impact the fees you pay, which then shapes the way you structure your pricing and communicate with your customers.
In this article, we’ll explore the legal landscape around surcharging, and what you can do to ensure compliance.
TL;DR
- Surcharging guidelines, influenced by laws and Supreme Court decisions, impact how merchants price and communicate fees to customers.
- While surcharging is permitted in the majority of US states and territories, there are nuances in their implementation.
- CardX ensures merchants are compliant with evolving surcharging laws. We automatically register businesses with card brands, provide signage tools, and ensure receipts are compliant with all guidelines and requirements.
The current state of surcharging laws in the United States
Credit card surcharging is legal in all US states and territories except Connecticut, Massuchets, and Puerto Rico. There are also a few nuances around the surcharging amounts and the way to communicate them to customers.
In the state of Maine, for example, merchants can implement surcharging as long as they disclose the Credit Card Price in dollars and cents whenever they post or quote their prices. Meanwhile, in Minnesota, businesses are required to inform customers of the credit card fee with signage at the store entrance (if applicable) and orally at the time of sale.
Take a look at this table below for more details on the availability of CardX in certain US states.
| State | Business | Government | Education | Notes |
| California | Yes | Yes | Yes | Following the March 2015 decision in Italian Colors Restaurant v. Harris, merchants can now use CardX in California. |
| Colorado | Yes | Yes | Yes | Yes, businesses can use CardX, so long as they comply with state surcharging requirements. |
| Connecticut | No | Yes | No | Check back for updates |
| Florida | Yes | Yes | Yes | |
| Kansas | Yes | Yes | Yes | |
| Maine | Yes | Yes | Yes | Yes, businesses can use CardX, so long as they disclose the Credit Card Price in dollars and cents whenever they post or quote their prices. |
| Massachusetts | No | Yes | Yes | Check back for updates |
| Minnesota | Yes | Yes | Yes | Yes, as long as the customer be informed of the credit card fee with signage at the store entrance (if applicable) and orally at the time of sale. |
| New York | Yes | Yes | Yes | Yes, businesses can use CardX, so long as they disclose the Credit Card Price in dollars and cents whenever they post or quote their prices. |
| Oklahoma | Yes | Yes | Yes | Following a December 2019 opinion letter from the Oklahoma Attorney General, merchants can now use CardX in Oklahoma. |
| Texas | Yes | Yes | Yes | Following the August 2018 decision in Rowell v. Paxton, merchants can now use CardX in Texas. |
It’s also worth noting that some states are passing bills to regulate surcharging. Take New Jersey, which passed a bill limiting the surcharge amount that businesses can impose.
According to Payments Dive:
The legislation prohibits a merchant in the state from imposing a surcharge that is more than “the actual cost to the seller to process the credit card payment,” according to a draft of the bill. It also requires merchants to disclose the surcharge before a transaction and to post a “clear and conspicuous sign” regarding the surcharge.
Needless to say, the surcharging landscape can be quite fluid; regulations change over time, and merchants need to be aware of these shifts.
The good news? Solution providers like CardX by Stax make compliance easy; our software automatically ensures that you’re charging the right amount and that fees are properly disclosed on your receipts.
Even better, CardX advocates for merchants’ best interests. Jonathan Razi, CardX’s founder (and now Chief Product Officer at Stax), actively works with legislators to ensure that policies and regulations are fair and balanced for both businesses and consumers.
How CardX by Stax advocates for merchants
At CardX by Stax, we continuously look out for legislative changes across states, to ensure our software is updated. This proactive approach means you can rely on us to stay ahead of the curve when it comes to compliance.
That said, we’re not just bystanders in the legislative process; we diligently champion the needs and interests of merchants. We ensure your voice is heard and regulations reflect the real-world needs and challenges faced by businesses like yours.
CardX is etched in the legal history of surcharging
Fact: CardX by Stax was the only solution provider to file a brief in Expressions Hair Design v. Schneiderman, contributing real-world expertise to a landmark U.S. Supreme Court case.
In March 2017, the Supreme Court held that state “no-surcharge” laws restrict constitutionally protected speech.
This helped pave the way for merchants to implement surcharging initiatives, while ensuring that any credit card fees and surcharges are transparently communicated to customers.
“That 8-0 victory opened a lot of new states to our model, and we continue to shape state law,” says Jonathan in an interview with The Strawhecker Group.
He continues, “We initiated the process that got us an official opinion letter allowing us to serve the state of Oklahoma. It’s been personally rewarding for me that, now when you see people recap the history of surcharge laws to date, you see CardX etched into the legal history of this matter. That’s really exciting for me, and we’re not done yet.”
Giving you tools and resources to stay compliant
CardX isn’t just a tech vendor; consider us as a surcharging partner you can rely on to ensure that your initiatives are legally compliant.
We register your business. Surcharging laws require that your business is registered with card brands. To that end, the CardX by Stax team completes the registration on your behalf.
Signage for customers. To ensure you properly disclose surcharging fees, we also provide you with all the necessary signage that you can display in-store, and wherever you implement surcharging.
Charging the right amount. Surcharging laws state that the credit card fee shouldn’t exceed 3% and merchants must not profit from surcharging. CardX by Stax’s solution ensures that 3% credit card fee is passed on to consumers, ensuring you receive 100% of the sale—no more, no less.
Compliant receipts. Per surcharging laws, your receipt must show the amount of the credit card fee as a separate line item. CardX automatically does this; our solution produces receipts that itemizes the credit card fee.
Final words
The evolving landscape of credit card surcharging laws and their interpretations by the Supreme Court has significant implications for merchants. As these regulations shape the fees that you pay, it’s vital to stay updated on the changes to ensure you’re compliant.
Fortunately, solutions like CardX by Stax not only help you with adhering to the latest guidelines, we also champion your rights and advocate for your best interests.
Ready to get started? Learn more about how CardX can help implement 0% processing in your business.
FAQs about Supreme Court Credit Card Decisions and Surcharging
Q: How can Supreme Court decisions affect my business in terms of credit card surcharges?
Certain Supreme Court rulings influence the legal environment around surcharging, thus directly affecting the fees merchants pay. These rulings and laws shape the way merchants structure their pricing and communicate fees to customers.
Q: What is the current state of surcharging laws in the United States?
Surcharging is currently legal in all US states and territories except Connecticut, Massuchets, and Puerto Rico. The rules for execution, such as amounts and disclosure methods to customers, vary by state.
Q: Can credit card surcharging laws change?
Yes, credit card surcharging laws are fluid and may change over time, resulting in potential modifications to the fees merchants pay. Hence, merchants need to stay aware of these shifts.
Q: How does CardX by Stax help with compliance to surcharging laws?
CardX by Stax offers software that ensures correct fee charging and proper disclosure on receipts, under the current surcharging laws. Their team also monitors legislative changes across states and makes necessary software updates, helping merchants remain compliant.
Q: What was CardX by Stax’s role in Supreme Court cases involving surcharging?
CardX by Stax was the only solution provider that filed a brief in Expressions Hair Design v. Schneiderman, a landmark U.S. Supreme Court case. The Supreme Court ruling of state “no-surcharge” laws restricting constitutionally protected speech, which was influenced by CardX’s brief, helped merchants implement surcharging initiatives while maintaining transparency to customers.
Q: What services does CardX by Stax offer to help customers stay compliant with surcharging laws?
CardX by Stax offers multiple services for this, including: registering businesses with card brands; providing necessary signage for the proper disclosure of surcharging fees; ensuring that the charged credit card fee does not exceed the legal limit of 3%; and generating compliant receipts that denote the credit card fee as a separate line item.
Q: What is the significance for merchants of the evolving landscape of credit card surcharging laws and Supreme Court interpretations?
These evolving laws and interpretations directly impact the fees merchants pay. Staying updated with these changes helps them remain compliant. Solution providers like CardX by Stax ensure adherence to the latest guidelines and also advocate for merchants’ rights and best interests.
