According to the answers on Can a merchant charge you more in the US if you want to use a credit card?, I gather that, while it is not illegal for a merchant to pass their payment card processing fees on to their customers directly in the form of a surcharge, doing so is a violation of their merchant agreements with the payment card processor (at least for Visa/MC).

There are workarounds available to the merchants, such as offering a cash discount, or setting a minimum purchase amount for cards, but if the merchant is not using such a workaround (in my experience, many don't), what's the best way to get them to process my transaction without applying the fee, or alternatively, penalize them for applying the fee?

JoeTaxpayer helpfully points out that merchants can now impose a surcharge in most states, subject to certain conditions, including signage at both point of entry and point of sale. This question is asked in the context of a merchant that fails to comply with these or other applicable requirements.

Please also note that "Don't patronize those merchants" isn't the kind of answer I'm looking for here. If the merchant were properly complying with all of the conditions under which they can impose a surcharge, that would be the only recourse, but I am interested in answers for the specific case of a noncompliant merchant.

Here are two actual examples from my personal experience. In neither of these cases was I successful in either compelling the merchant to complete the transaction without imposing the surcharge, or in causing a direct repercussion to the merchant sufficient to induce them to discontinue the practice.

A local pizza place would add an additional $0.50 charge for purchases made by credit card. I was aware of this practice, and I had also read that Visa and MasterCard both prohibit it. When I went in to pick up my pizza, they asked if it would be cash or credit. Before answering, I asked "What's the total?" They quoted me an amount equal to the menu price plus sales tax if I paid cash, and stated that if I used a credit card it would be an extra 50 cents. I told the cashier that this was not allowed, but the cashier indicated it was not up to them. They stated that most of their customers just paid in cash. They were busy, I was hungry, and I had no cash on me, so rather than continue to press the issue, I asked the cashier to be sure that my receipt clearly distinguishes the amount of the fee and identifies it as a surcharge specifically imposed because I paid with my card. She handwrote "CC" next to the 50 cent line item, and I left with my food and put the receipt somewhere so it wouldn't get lost, telling myself that I would contact Visa about it (I never did, and I lost the receipt anyway).

I stopped at a convenience store on my way to the disc golf course to buy two bottles of Gatorade. The cashier (I think he was also the owner) scanned them and read me the total. I held out my credit card and he said "Oh, there's a 35 cent fee with that." I replied "No, I do not agree to that." He stated that the store incurs a cost every time they process a credit card transaction, and something about margins. I responded along the lines of "I don't really care what your margins are. Those fees are a cost of doing business, and Visa and MasterCard both explicitly prohibit you from charging me extra to use my card." However, he did not change his position. I left the bottles on the counter and walked across the street to his competitor, and as far as I know, he still charges that fee.

UPDATE: As it happens, both of these shops went out of business, even though I never did follow up personally with the payment processors about them.

  • 8
    Not make a purchase from those merchants?
    – Pete B.
    Jun 24, 2016 at 17:38
  • 2
    On a practical level, I think your second example illustrates why it's a good idea to carry a small amount of cash. In my experience these types of charges are (understandably) more common for small transactions, and for businesses that deal primarily in small transactions (like convenience stores). Those are the times when you want $5 or $10 cash to get your snack.
    – BrenBarn
    Jun 24, 2016 at 19:09
  • 7
    A small business I went to once had a discover sign on the door but didn't take discover - discover fired them as a customer. Pursue this if you must, if you're prepared for the outcome to be to cause the card issuer to drop the business. Then get a real hobby. -1 for asking how to become an unpaid tool of multinational banks to enforce their preferred social norms on poorly capitalized mom and pop businesses. They shouldn't need your help, and you should have more productive ways to improve the world.
    – user662852
    Jun 24, 2016 at 22:54
  • 4
    Why do you want to do this? You know that Visa/MC don't prohibit these fees out of your own best interests, but rather to exploit their duopoly and extort the merchants, right?
    – user27684
    Jun 26, 2016 at 3:07
  • 2
    @user662852 Enough of the sob story of poor mom & pop stores. They can chose not to accept any cards at all. They want the benefits of taking cards without having to pay for it.
    – Andy
    Sep 12, 2017 at 0:46

6 Answers 6


You can report the violation to the payment network (i.e., Mastercard or Visa). For instance here is a report form for Visa and here is one for MasterCard. I just found those by googling; there are no doubt other ways of contacting the companies.

Needless to say, you shouldn't expect that this will result in an immediate hammer of justice being brought down on the merchant. Given the presence of large-scale fraud schemes, it's unlikely Visa is going to come after every little corner store owner who charges a naughty 50-cent surcharge. It is also unlikely that threatening to do this will scare the merchant enough to get them to drop the fee on your individual transaction. (Many times the cashier will be someone who has no idea how the process actually works, and won't even understand the threat.) However, this is the real solution in that it allows the payment networks to track these violations, and (at least in theory) they could come after the merchant if they notice a lot of violations.

  • 1
    Or the result is the card issuer cuts off the merchant, denying future card holders the convenience.
    – user662852
    Jun 24, 2016 at 23:12
  • 3
    @user662852: That would appear to be the OP's goal (or at least one manifestation of it).
    – BrenBarn
    Jun 25, 2016 at 1:37
  • @user662852: In that scenario, the card issuer would presumably inform the merchant that they are in violation of their processing agreement, and advise the merchant to discontinue charging the fee. They might also advise the merchant on alternative approaches to offset the expense of card processing fees, while remaining compliant with the agreement. Jun 14, 2019 at 16:07

This might not be the answer you are looking for, but the alternative to "don't patronize these merchants" is this:

DO patronize these merchants, and pay cash.

Credit cards are convenient. (I use a credit card often.) However, there is no denying that they cost the merchants an incredible amount in fees, and that our entire economy is paying for these fees. The price of everything is more than it needs to be because of these fees. Yes, you get some money back with your rewards card, but the money you get back comes directly from the store you made the purchase with, and the reward is paid for by increasing the price of everything you buy. In addition, those among us that do not have the credit score necessary to obtain a rewards card are paying the same higher price for goods as the rest of us, but don't get the cash back reward.

Honestly, it seems quite fair to me that only the people charging purchases to a credit card should have to pay the extra fee that goes along with that payment processing. If a store chooses to do that, I pay cash instead, and I am grateful for the discount.

  • 3
    @BenMiller, an often ignored fact is that paying cash has also cost for the shop owner. According to Walmart, the handling of cash is about 1.8 % - and that is for the volume of a Walmart. you need to protect the cash, you need to bring it to the bank (they take a fee too), and you have to live with losses due to wrong change, employee theft, etc. For smaller volumes, this might easily surpass the cost of credit card transactions - it is just not as visible for the shop owner. A credit card payment just pops into your account, with no further ado.
    – Aganju
    Jun 24, 2016 at 19:08
  • 5
    @Aganju Perhaps, but even at 1.8%, it is much less than typical credit card fees. And the cost of cash is different for every business; for a small mom-and-pop store owner, the cost of cash is very little, as they handle the depositing themselves. The point is that cash is cheaper than credit cards, and cash customers have been subsidizing credit card customers for a long time.
    – Ben Miller
    Jun 24, 2016 at 19:11
  • 2
    No, my point is that it is not cheaper, especially for the small mom-and-pop shop, the cost are just better hidden. Driving to the bank every day cost gas and mileage (which gets ignored), time (which gets ignored), and getting robbed every 5 years in average costs money too. The average credit card processing cost for a retail business where cards are swiped is roughly 1.95% - 2% (source: cardfellow.com/average-fees-for-credit-card-processing).
    – Aganju
    Jun 24, 2016 at 19:17
  • 3
    @Aganju That's not really for you to decide. You must admit that is conceivable that cash is cheaper for a particular business than credit. And if a business says that it is cheaper for them, you can't really argue with it without opening up that business's books. Getting off-topic, cash depositing costs for time and mileage are the same every day, whether it is $100 or $10,000 being deposited. And any business that accepts cash has to have change available, whether or not they have any cash purchases that day. Those costs are fixed, but credit card fees take a percentage of every sale.
    – Ben Miller
    Jun 24, 2016 at 19:24
  • 2
    Credit cards are also a convenience for the businesses, I don't think it being a convenience to the customer justifies them violating their agreement with the issuers.
    – nikhil
    Jun 25, 2016 at 1:18

Mastercard rules also prohibit asking for ID along with the card. Yet, when I was at Disneyland, years ago (so I don't know if this is still a practice) they asked for my driver's license with every purchase. I can charge up to $200 at Costco with a swipe, not even a signature, but a $5 bottle of water (maybe it was $6) required me to produce my license.

The answer is Pete's comment, don't patronize these merchants. By the way, it's legal now. From Visa web site -

enter image description here

Note - 9* states still prohibit surcharges, so they tend to offer cash discounts. The question you linked is from 2010, things change.

  • California ruled that prohibiting surcharges is unconstitutional. The Attorney General is appealing that ruling, but until a decision is made, surcharging is technically legal in California. The AG's website has info, scroll to the end: https://oag.ca.gov/consumers/general/credit_cards
  • What if the merchant doesn't have compliant signage? Can you amend your answer for that scenario? While the information about the change in policy is helpful, I am more interested in the core of the question - what to do, as an individual consumer, when a merchant violates the rules. "Don't patronize" would be a valid answer for a compliant merchant, but that's not what I'm asking about. (FWIW, in my two examples, neither merchant had any signage whatsoever.) Jun 24, 2016 at 18:12
  • The image I post says "disclosure." That's it. The real question to you, are you willing to make a scene over 50 cents or $1? You'd win in small claims court, but is it worth your time? Jun 24, 2016 at 18:16
  • Depends on the number of available choices of merchant and the frequency of transactions. Besides, it's not just my 50 cents - it's everyone else's 50 cents too. Jun 24, 2016 at 18:27
  • Agreed. But, then the question quickly becomes not-personal-finance, and a legal question instead. You need to get a lawyer willing to go after a small pizza shop for a class action lawsuit. Personally, I'd go after Disney first. Follow the money. Jun 24, 2016 at 18:30
  • Legal recourse is certainly one possible option, and if that's the only one you can think of, then go ahead and put that in your answer (that would essentially just be "talk to a lawyer"). But I suspect that there may also be other approaches that could be equally effective. Jun 24, 2016 at 18:51

It may seem very simple on its face but you don't know the merchant's agreement. You don't know who is providing the processing equipment. You don't know a lot of things. You know that Visa, Mastercard, Discover, Amex and others have network requirements and agreements. You know that laws have been changed to allow merchant surcharges (previously it was contracts that prohibited surcharges, not laws).

That gas station, or that pizza parlor, or any other merchant doesn't have a direct relationship with Visa or Mastercard; it has an agreement with a bank or other processing entity. The issue here, is whom do you even call? And what would you gain? Find out what bank is contracted for that particular equipment and file a complaint that the merchant charged you $0.35? Maybe the merchant agreement allows surcharges up to state and local maximums? You don't know the terms of their agreement. Calling around to figure out what parties are involved to understand the terms of their agreement is a waste of time, like you said you can just go across the street if it's so offensive to you. Or just carry a little cash.

If that's not the answer you're looking for, here's one for you: There is no practical recourse.


You have no recourse on the spot to do anything to the vendor other than pay the fee, pay cash, or walk away. If you're on a mission with longer-term horizon than immediate satisfaction, your options will vary by state. If you're in a state where the fees are legal and the owner is (potentially) violating an agreement with the card company, you can report the vendor to the card company. They may or may not really care. If you're in a state where the fee is actually illegal, you'd need to see what options you have with the local authorities.

You should keep in mind that if the vendor is violating an agreement that's between the vendor and the card company only, you have absolutely no rights to enforce that agreement. You only have legal rights if you're a party to the agreement in question or if the law gives you some special rights specific to given circumstances. (The lawyers call this having "standing.") Likewise if the vendor is doing something that's not consistent with the agreement between you and the card company, you also have no claim against the vendor (because the vendor is not party to your agreement with the card company), although you might have a claim against the card company.


"I gather that, while it is not illegal for a merchant to pass their payment card processing fees on to their customers directly in the form of a surcharge, doing so is a violation of their merchant agreements with the payment card processor (at least for Visa/MC)."

It's not - surcharging has been permissible since 2013, as a result of a class action lawsuit against Visa and MC. It's still prohibited by state law in 9 states.

If you're in one of those 9 states, you can contact your state Attorney General to report it. If you're not, you can check to see if the business is complying with the rules set forth by the card brands (which include signage at the point of sale, a separate line item for the surcharge on the receipt, a surcharge that doesn't exceed 4% of the transaction, etc.) and if they're in violation, contact the card company. However, some of those rules seem to matter to the card companies more than others, and it's entirely possible they won't do anything. In which case, there's nothing you can really do.

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