Credit Card Surcharge Questions?

9/13/2023

Over the last few years, as food, labor and property costs have increased, a new trend has emerged to help offset the cost of accepting credit cards called Surcharging. By now, you might have experienced this practice in restaurants and retail stores, but there still lies confusion around the Surcharging rules and who enforces them.

In the State of Wisconsin, it is legal to charge a surcharge to credit cards as long as the customer is notified in writing prior to checking out. It is against card brand rules to add a surcharge to sales completed by debit card, regardless of using the debit card or credit card network. You must also apply the same surcharge amount to all cards and cannot offer a cash discount in conjunction with surcharging. In short, it must be one or the other across the board.

What changed?
Starting April 15, 2023, Visa imposed a maximum of 3% surcharge rule for all credit cards to help recoup some or all of the card processing costs. Visa’s decision to reduce this from 4% to 3% is due in part to an increase in surcharge related violations and confusion around the rules.

What would happen if we chose not to follow card brand rules?
Visa employs secret shoppers as well as a public facing document for violation reporting. If caught, a cease and desist letter is sent, followed by fines up to $10,000 PER OCCURENCE. If the business or business owner continually repeats the offense, Visa can remove their ability to accept Visa cards permanently.

What actions do you need to take?
If you are currently surcharging, ensure your point of sale can detect debit vs credit cards so that a surcharge is not mistakenly added to a debit card. Also, ensure that your surcharge does not exceed 3% to the customer.

Finally, update your in store and/or menu signage to reflect this change and create transparency for the customer.

Special thanks to Heartland Payment Systems for providing this information.

Questions? Email or call the AskWRA Team at 608.270.9950

4 Comments

Michael Hill

11/1/2023 02:18:53 pm

What is the WRA doing to let restaurants charge what we need to charge, because of all of the fee's and percents that the card companys charge us??

Susan Quam

11/8/2023 04:02:21 pm

Thanks Michael for the question. What restaurants charge for credit card convenience fees are set by the card issuers, like Visa and Mastercard and are governed by your card processing agreements. State and federal governments have no rules in place that limit those fees or what the these companies and large banks charge. There is little government appetite for limiting the fees, however there is another way WRA and the National Restaurant Association is working on to help drive your fees down.

We are working hard at the federal level to pass the Credit Card Competition Act (CCCA). This bill would require at least two competing processing networks to be enabled on every credit card. By enhancing competition in the market, this legislation would drive down swipe fees, improve security and service, and save businesses — including restaurants — and consumers an estimated $15 billion a year.

This of course is opposed by the card and banking companies, since it would eat into their enormous, record profits - usually 30 percent - and force them to compete for your processing business. You may have seen the ads on TV that state that the CCCA only benefits the "big box stores" and will take away consumer loyalty programs. Of course this is not true and it will help restaurants and all small businesses who are being hammered with fees and zero profit margins.

For more information on the CCCA, check out this fact sheet https://restaurant.org/getmedia/36d3b3ce-ce3a-45c8-b009-0dd862d4fbcf/policybrief_cccompact_sept22.pdf

Even better, tell your US Representative and both US Senators to support the CCCA here: https://p2a.co/qryw5um

Michael Vesperman

2/7/2025 11:00:19 am

It is my understanding that restaurants and businesses are not allowed to charge or add surcharge fees when using a debit card irregardless is swiped like a credit card transaction.

I find these charges very frustrating as it also my understanding debit card transactions are considered the equivalent to using "cash". During the Covid19 Pandemic restaurants did not want to accept physical cas preferring the use of plastic in its place. Now these same establishments want to add a surcharge for using the the same form of payment they preferred. I can accept when using a credit card the logic behind a surcharge provide it does not exceed the 3% as mandated by the VISA/Mastercard settlement. I read and hear how restaurant and bar owner complain how business is down. Maybe tell them look in the mirror and ask if they creative unpleasant, frustrating experience for the patron. As somone who frequently eats out, the experience has become unenjoyable. Food quality and consistency is poor to bad. The idea of tipping somone 18, 20, 25-percent to do nothing is ridiculous. During Covid many, included myself, tipped those on the front line. Today restaurants are expecting tip for not providing a service, whether placing and order a cash resgister or at a kiosk. What happened to earning your tip for providing a service and doing a good job doing it? Adding surcharge is just adding to the problem.

How does one file grievence in Wisconsin against establishments that charging the surcharge fee on debit cards?

Brenda Salseg

10/30/2025 01:36:22 pm

I think there is a lot of confusion on the transaction fee, both on the business and consumer sides. I have recently noticed more establishments in my area posting a 3.5% fee for credit card purchases, debit cards included. I get why the establishment are doing so, as the fees businesses must pay are eating away at their profits. However, if I am using my debit card without using my PIN, but as a credit transaction, I am told the fee applies. It is my understanding the transaction regardless of method is still a debit directly from my bank. Please advise.

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