Surcharges

Connecticut law as amended by Sec. 28 of Public Act 24-142 prohibits a business from charging a customer a surcharge, which is any additional charge or fee for using one payment type (usually credit card) over another payment type (usually cash).  However, the law does allow a business to offer a cash discount.

Some businesses may tell you that you’ll be charged an additional fee for paying with a credit card, which violates the law. In most cases, however, it may be difficult to tell if a business is charging a surcharge or offering a legitimate cash discount.  For example, a business may list the price for an item and then charge a fee when you pay by credit card; these charges will often be represented as a “transaction fee”, “processing fee”, or “non-cash adjustment” on the receipt. This would be a surcharge.

One way a business can comply with the law is by posting a sign stating, “all listed prices are discounted by 3% if you pay in cash”. Another way a business can comply is to have dual pricing by listing a cash price and a credit card price. Gas stations do this already, as required by law if they offer a cash discount. 

There are a few important exceptions to the surcharge law. Municipalities, government agencies, and courts are allowed to add additional fees for using a particular payment. For example, you might be charged an additional fee if you pay your taxes, a registration, fee, or fine with your town, a state agency, or a court by credit card.  Additionally, if a state marshal is collecting taxes on behalf of a town, they are allowed to charge an additional fee. 

Frequently Asked Questions:

• What is the Connecticut surcharge law? 
• What type of business has to follow the surcharge law? 
• Can a business charge a “convenience fee”?
• What are the requirements with respect to cash discounts?
• Can a business ask their customers to voluntarily pay an additional fee to cover their credit card processing fees?
• Is it illegal to charge an additional fee on transactions through a third-party processor?
• Can condominium associations charge an additional fee on the payment of common fees?
• Can public schools charge an additional fee if they are collecting payment for lunch accounts?