Call it surcharging, cash discounting, a “convenience fee” or what you will, this is all adding a fee based on form of payment, which is prohibited under CT state law.
But don’t take our word for it. Here is the link to the applicable general statue: https://cga.ct.gov/2022/ACT/PA/PDF/2022PA-00104-R00HB-05330-PA.PDF#page=56
And here is an article clarifying it, including so called “cash discount” programs that add a fee then take it away if paid cash: https://portal.ct.gov/DCP/Legal/Credit-Card-Surcharge
You may get a pushy salesperson insisting that you absolutely can a separate fee for credit card payment. However, this is not the case. Perhaps the agent you are speaking with is new and don’t know that there are two states (CT and MA) where it is statutorily prohibited.
Or, they may know its illegal but insist anyway that you can (aka lie) because it’s so lucrative. Let’s say for example you’re currently paying a 3% average processing fee. The processor is making half a percent, give or take, at that rate. With a surcharge or cash discount program, the surcharge is typically 3.99%. So now they are going from making 0.5% to making 1.5%, tripling their profit. They are insistent because it’s worth hundreds, if not thousands of dollars a month in revenue for them, not because its legal for you to do.
To give a little history on surcharges, it used to be a card brand rule (Visa / MC / Discover / Amex) that you cannot add a fee for payment by credit card. However, in 2013 this was struck down by the courts. At that time, there were 10 states that, card brand rules aside, had state laws that prohibited surcharging credit cards. As of this writing, that is down to just two states – CT and MA.
But what about gas stations?
Gas stations are not charging you more for credit. They are charging you less for cash.
But I had to pay a fee for credit card payment on my property taxes.
The legislature added an exemption for state and municipal government fees, fines and taxes.
But I got a fee on my card when I was in another state
Only two states – Connecticut and Massachusetts – have a law like this. An added fee for credit card is acceptable anywhere else, as long as its properly disclosed.
But I got a fee on my card on a transaction I made in CT.
Like any law, its only applied if you’re caught. Its not impossible to fly under the radar. But its $500 per offence (IE per transaction) if caught.
That being said, there are ways to achieve the same outcome that are complaint with CT state law. Namely presenting the credit price as your “regular” price, and offering a discount if paid by other means. Depending on the nature of your business this can be simple or require some work, but we can assist with software to help with this process.
If you’re looking for real, honest service from local payment experts, please reach out via the form below. We can help get your acceptance rates as low as possible. If CT law changes and you can surcharge, we can assist with setting that up. And if you are interested in pricing in cash and credit, we can help there too.