Credit Card Surcharges
Connecticut law prohibits a business from charging a customer a surcharge for choosing one payment type (usually credit card) over another payment type (usually cash). However, the law does allow a business to offer a discount if a customer chooses to use one type of payment (e.g., cash) over another type of payment (e.g., credit card). Receiving the discount is not the same as adding a surcharge. As long as the final receipt shows a discount, it complies with Connecticut law.
A business cannot list the discounted price for using a preferred payment type in an advertisement (e.g. menu or price sticker) and then add a fee during the sale if another payment type is used. For example, a menu cannot list the “cash price” for an item, but then charge you a fee if you pay by credit card. If the listed price does not match the price on your receipt, you should remind the business that a surcharge cannot be charged based on your type of payment and seek a refund of the fee. It may be helpful to show this webpage to the business.
There are a few important exceptions to the surcharge law. Municipalities, government agencies, and courts are permitted to use surcharges. For example, you might be charged a surcharge if you pay a registration, fee, or fine with your town, a state agency, or a court. Gas stations are also allowed to impose surcharges.
Ways to protect yourself from unlawful surcharges:
- Watch out for “transaction fees,” “processing fees,” or “convenience fees.” These might be hidden surcharges. A legitimate transaction, processing, or convenience fee relates to the method of payment (e.g., by mail, by phone, by internet), but not the type of payment (e.g., debit card, cash, credit card, money order). For example, a company may fairly charge you a convenience fee if you pay by internet, but that fee is waived if you pay by phone.
- Check the register, the menu, or your bill for a sign or fine print stating that a surcharge will be added if you do not pay with a preferred payment method. Remember, a business may give you a discount for paying by cash, it just cannot charge you a fee if you use a credit card.
- Ask the cashier, server, or other employee whether a surcharge will be charged if you pay with a credit card before you hand your card over. It is easier to avoid paying the charge than to try to get it refunded.