Question 1

What is a surcharge?

Accepted Answer

A surcharge is when you add a fee to the total when a customer pays with a card. This raises the price at checkout and is not allowed in California when prices are not shown up front.

Question 2

What is a cash discount?

Accepted Answer

A cash discount gives a lower price to customers who pay with cash. The higher price is shown first, and the system removes a small amount when cash is used.

Question 3

What is dual pricing?

Accepted Answer

Dual pricing shows both prices before the sale — one for cash and one for card. The customer sees both and chooses how to pay. This is the most transparent and compliant method.

Question 4

Why can’t I just add a small fee for card payments?

Accepted Answer

Because card brands see that as changing the advertised price after the fact. If the customer doesn’t know about the higher card price before they pay, it violates Visa and Mastercard rules.

Question 5

Am I allowed to call it something else, like a “service fee” or “non-cash adjustment”?

Accepted Answer

No. Changing the name does not make it legal. If the price goes up when someone uses a card, it’s still a surcharge.

Question 6

What does California SB 478 mean for my business?

Accepted Answer

SB 478 bans hidden or surprise fees. You must show the full price before checkout. Adding a fee later violates this law.

Question 7

What if my processor told me this setup is fine?

Accepted Answer

What if my processor told me this setup is fine?

Processors and sales reps are not responsible for compliance — you are. Even if someone else turned it on, you are the merchant of record. Visa and Mastercard can still fine or terminate your account.

Question 8

What happens if I get caught breaking the rules?

Accepted Answer

Visa and Mastercard use secret shoppers and monitor transactions to find violations. Businesses that get caught face large fines, chargeback losses, or their accounts being shut down.

Question 9

What happens if my account gets shut down?

Accepted Answer

Your business may be placed on the MATCH list, which can make it very hard or impossible to get another merchant account in the future.

Merchant Compliance Info

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