BPA POS Solutions | Update On Credit Card Fee Recapture Programs

Point of Sale software news, updates, and insights

Update On Credit Card Fee Recapture Programs

Feb 23, 2024

The last several years have seen a dramatic increase in the usage of programs like surcharging, cash discounts, or non-cash adjustments. These programs are designed to increase profits in restaurants and other businesses by passing credit card processing fees back to the consumer.

In response to these programs, credit card processing networks and federal and state governments continue to update regulations regarding credit card fees and surcharges.

Current regulations prohibit many methods that businesses are currently using to recapture credit card fees. We’ve worked closely with Clearent and Visa to understand what is allowable and find ways to implement compliant programs.

In the past, Clearent has provided a “Non Cash Adjustment” program that allowed us to add a fee to a ticket for payment with credit cards. This program is no longer considered compliant with current regulations, and customers who are charging credit card fees as a Non Cash Adjustment or a blanket card fee need to move to a new program.

We are currently working with Clearent to implement new options.

Credit Card Surcharging

Explanation: Credit card surcharging is the practice of adding an extra fee to transactions made with credit cards to cover processing costs. By federal law, credit card surcharges can only be applied to transactions on true credit cards. Credit transactions run on debit cards are not eligible. Additionally, processing networks cap the surcharge fee at 3%. For most restaurants only about 40% of card transactions are eligible for surcharging. Combined with the fee cap this means that surcharging cannot completely cover merchant processing fees.

Because only eligible cards can be surcharged, surcharging must be implemented at the gateway by your processor. We are working with Clearent to support surcharging functionality through their integrated processing.


  • Helps offset payment processing costs


  • Cannot fully recapture fees
  • Potential customer backlash
  • Surcharging is prohibited in six states: Colorado, Connecticut, Kansas, Maine, Massachusetts, and Oklahoma

Cash Discounting/Dual Pricing

Cash discounting and dual pricing require restaurants to publish either (a) their card price or (b) both card and cash prices for all items. You may not display only the cash price. A defined discount can be applied for non-card payments, or the alternate cash price can be charged for non-card transactions. Replacing a Non Cash Adjustment program with a cash discount or dual pricing program will require restaurants to update menus, displays, and any place where prices are displayed to show the card price.


  • Provides clear pricing to customers
  • Encourages lower-cost payment methods


  • May requires reprinting menus, signs, etc. to show card price
  • May cause frustration to customers that do not have cash
  • May be leaving money on the table for cash payments

Note: Cash discount or dual pricing requires your menu prices to be the credit card prices. Unless you will bring more business in by offering the lower price to cash customers, you are leaving money on the table using one of these programs. Our opinion is that the best strategy for handling the cost of credit card processing is to build it into your product pricing and charge all customers the same price regardless of payment method.

More Information

For more information on both surcharging and cash discounts please see the Visa Q&A

Penalties For Non-Compliant Surcharging

Enforcement of surcharging regulations is primarily provided directly by processing networks such as Visa. Merchants charging improper fees on Visa transactions will be assesed a fine of $1000 that can escalate to $150,000 for continued non-compliance.

Recently Visa has begun to step up enforcement efforts through the use of customer reporting and secret shopper programs.

Moving Forward

If you want to implement one of these strategies for recapturing card processing fees, please contact us, and we’ll let you know as soon as these programs are available.

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