Credit Card Surcharges

Connecticut law prohibits a business from charging a customer a surcharge for using 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 discount policy is clearly written and presented to the customer and 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 because an additional fee has been added based on the payment type you used, 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. Businesses can be penalized $500 per violation under Connecticut law for charging surcharges.

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. 

Ways to protect yourself from unlawful surcharges:

  1. Watch out for “transaction fees,” “processing fees,” or “convenience fees.” These might be hidden surcharges. 
  2. Check the register, the menu, or your bill for a sign 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.
  3. If a cash discount is being offered, a business must clearly notify customers to this discount.  For in-person transaction, a notice must be prominently posted on the premises.  For online transactions, including smartphone apps, a prominent notice must appear on screen prior to completing a transaction.  Also, for verbal transactions (e.g., over the telephone) notice must be communicated prior to completion of the transaction.
  4. Ask the cashier, server, or other employee whether any additional fee will be charged if you pay with a credit card before you hand your card over. If a business does illegally add a surcharge, it is easier to avoid paying the charge than to try to get it refunded.

See Connecticut General Statutes § 42-133ff (Updated by Sec. 36 of P.A. 22-104).