Is It Legal to Charge a Credit Card Fee in Florida?

Yes, a Florida business can recover the cost of card payments, and the safest way is a cash discount. Florida law expressly allows a business to offer a discount to customers who pay by cash, check or other non-credit methods, as long as the discount is offered to everyone.

Surcharges are more complicated. Florida’s statute still prohibits them on paper, but a federal appeals court struck that prohibition down in 2015. Here is what that means in practice.

What Does Florida Law Actually Say?

The rule is in section 501.0117 of the Florida Statutes. It says a seller cannot impose a surcharge on a buyer for choosing to pay by credit card, and it makes a violation a second-degree misdemeanor.

The same section carves out an exception. It does not apply to a discount offered to induce payment by cash, check or other means not involving a credit card, if the discount is offered to all prospective customers. You can read the statute on the Florida Senate’s website.

So the statute treats the same price difference two ways: a “discount” for cash is allowed, while a “surcharge” for credit is not.

What Did the Courts Decide About Surcharges?

In November 2015, the federal Eleventh Circuit Court of Appeals ruled in Dana’s Railroad Supply v. Attorney General of Florida that the surcharge prohibition violated the First Amendment.

The court’s reasoning was that the statute did not ban charging different prices for cash and credit at all. It only banned describing the difference as a surcharge rather than a discount, which made it a restriction on speech.

The statute was never repealed, though, and it still appears in the published Florida Statutes. That leaves Florida in an unusual position: the surcharge ban is on the books, but a federal court has held it unconstitutional.

So Can a Florida Business Add a Surcharge?

Some Florida businesses do, relying on the 2015 ruling. But because the statute remains in print, a surcharge carries more legal uncertainty than a cash discount.

That is why we recommend that any business considering a surcharge confirm its approach with its own attorney. A cash discount program reaches a similar result while resting on the statute’s own express exception.

What Is the Difference Between a Cash Discount and a Surcharge?

The two can produce the same prices, but they are built in opposite directions.

A cash discount starts from the card price. Your posted prices include the cost of card acceptance, and customers who pay by cash or check pay less.

A surcharge starts from the cash price. Your posted prices stay the same, and a fee is added when a customer pays by credit card.

The customer may see a similar total either way. What differs is the legal footing and the card network rules that apply.

What Do the Card Networks Require?

Card network rules apply to every merchant, whatever the state law says. For surcharges, the key rules are:

• Credit cards only. No surcharge may be applied to a debit card, even one run as credit.
• A cap. Visa limits a surcharge to the lower of the merchant’s actual cost of acceptance or 3%.
• Advance notice. Visa requires merchants to notify their processor at least 30 days before surcharging, and Mastercard requires registration through the processor.
• Clear disclosure. The surcharge must be posted at the entrance or point of sale, disclosed online before payment, and shown as its own line on the receipt.

A cash discount program needs its own care: clear signage, a discount offered to every customer, and terminals set up to apply it consistently.

Does a Card Fee Change the Sales Tax?

Yes. The Florida Department of Revenue has advised that a card processing charge passed on to a customer on a taxable sale is part of the taxable sales price (Technical Assistance Advisement 22A-006). In other words, sales tax is due on the higher card price.

Your point of sale has to calculate tax on the right figure, and our sales tax compliance service keeps the returns accurate.

What About Customers in Other States?

Rules differ by state. A business selling across state lines, online or in person, needs a program that fits every state it sells into, not just Florida.

Is a Card Fee Program Right for Your Business?

It depends on your margins, your customers and how they pay. For some businesses, simply moving to better processing recovers enough margin that no fee is needed. Moving from a flat-rate processor such as Square or Stripe to pricing built on actual card costs can cut processing costs by up to half, as our guide to credit card processing fees explains.

For others, a program that offsets fees entirely makes sense. Our cash discount and surcharge programs page explains how The Gabb Group sets them up, from signage to receipts to the entries in your books.

This article is general information about Florida law and card network rules as of its publication date, not legal advice. Confirm your own program with an attorney.