If you've heard you can pass card fees to customers, you've probably heard three different names for it — surcharging, cash discounting and dual pricing. They are not the same thing, and the differences matter legally. Here's the plain-English breakdown.
Surcharging
A surcharge adds a fee on top of your listed price when a customer pays with a credit card. It's the most restricted of the three: card-brand rules cap the surcharge (no more than the cost of acceptance, and never more than the current brand cap), it can only apply to credit cards — never debit — and a handful of states still restrict or prohibit it. You also have to register with the card brands and disclose the fee before checkout and on the receipt.
- Credit cards only — never debit or prepaid
- Capped and disclosure-heavy
- Not permitted in every state
Cash discount
A cash discount flips the math: your listed price is the card price, and customers who pay cash get a discount. Because you're discounting rather than adding a fee, it's legal in all 50 states when displayed and receipted correctly.
Dual pricing
Dual pricing shows both prices up front — cash price and card price side by side on the shelf, menu or terminal screen — and the customer simply chooses. Customers consistently rate it the most transparent option, and like cash discounting it's legal nationwide when set up correctly.
Which should you use?
For most main-street businesses, dual pricing or cash discount wins: nationwide legality, simpler rules, and effective processing costs at or near zero. Surcharging can fit B2B and card-not-present businesses that can't re-paper prices. Either way, the setup — signage, receipts, terminal configuration — is what keeps you compliant, and that's the part we handle for you.