Compliant Surcharge Checklist: Protect Your Dealership’s Margins Without Breaking the Rules

What is a Surcharge?

A surcharge is a small fee added to credit card transactions to offset payment processing costs. It allows dealerships to protect profit margins without raising prices across the board. 

Offsetting credit card processing fees with surcharging is legal in most states and can be implemented without generating customer complaints, but only when done correctly. That's why PayJunction offers a wide range of surcharging materials and support to help dealers successfully offset their credit card processing costs while remaining compliant with surcharge laws. 

Your Essential Compliant Surcharge Checklist

• Post Clear Disclosures: Surcharge notice must be shown before payment both in-store and online.
• Limit the Surcharge Amount: Maximum surcharge cap is 3% or the actual cost of acceptance, whichever is lower.
• Equal across all credit card brands: The surcharge % must remain consistent.
• No surcharges on debit cards or prepaid cards: Even if run as credit.
• Receipt Requirements: Surcharge must appear as a separate line item labeled “Credit Card Surcharge” or similar.
• Follow State Surcharge Laws: Surcharging is not permitted in all states and has special requirements in others. Confirm legality first.
• Follow Card Brand Rules: These include registering with Mastercard 30 days before surcharging.
• Option to Cancel Transaction: Customers must have the option to cancel the surcharged transaction.
• Don’t confuse Surcharge with Cash Discounting: Cash discounting offers a discount to customers who pay with cash (or debit) and is not the same as surcharging.

NOTICE: Violating surcharge rules can lead to fines, chargebacks or loss of payment processing privileges. 

Want more Surcharge Materials? Get surcharge signage, team training tools, and payment insights from our Automotive Resource Hub.

Already Surcharging? Make Sure You’re Not Leaving Money on the Table

If you’re already surcharging, a quick checkup can ensure you’re staying compliant and not missing out on savings. Use this 6-point checklist to spot easy wins:

• Automatic Card Type Detection: Your provider should ensure the system automatically distinguishes credit from debit so you never accidentally surcharge debit cards.
• Clear Cancel Option at Checkout: Use customer facing terminals with built in prompts that disclose the surcharge amount and allow customers to cancel the transaction before it’s finalized.
• Full Refunds That Include the Surcharge: If a transaction is canceled or refunded, your system should return the full amount, including the surcharge, without creating manual work or extra cost for your team.
• Compliant, Professional Signage: You shouldn’t have to guess what's required. Your provider should supply samples of clear, branded signage that meets card brand and legal standards ready to post at your entrance, point of sale, and online checkout.
• Surcharge Line Item on Receipts: Receipts should automatically show the surcharge as a separate line labeled “Credit Card Surcharge” or similar, without needing to manually configure each terminal.
• Optimized PIN Debit Pricing with Interchange Plus: Even though debit can’t be surcharged, a provider like PayJunction will offer you the option to set up Interchange Plus pricing on PIN Debit transactions, so you pay the lowest possible rate for every transaction.

How One Dealership Saved $130K+ With PayJunction’s SmartSurcharge

When one dealership partnered with PayJunction and activated our compliant SmartSurcharge solution, they saw their effective credit and debit rate drop 68%. That added up to more than $130,000 in annual savings per rooftop.  

Here’s an example of how credit card surcharging can impact a dealership’s monthly credit card processing costs:

Already Surcharging or Just Getting Started? Partner with PayJunction to Surcharge with Confidence

Whether you are exploring credit card surcharging for the first time or already passing on credit card processing fees, we’re here to help you stay compliant with credit card acceptance rules and surcharge laws. Plus, we ensure your PIN debit transactions are priced to your advantage with Interchange Plus, so you're saving no matter what kind of card is being used.

You deserve a credit card processor that helps you offset your credit card fees with confidence. Ready to maximize your dealership’s savings for both debit and credit card transactions?