The Green Sheet Online Edition
November 9, 2026 • 26:11:01
Dual pricing today: Mainstream adoption, uneven compliance
Passing card costs to the customer is no longer a fringe practice. J.D. Power's 2026 U.S. Merchant Services Satisfaction Study, which surveyed 4,407 small businesses, found that 35 percent of merchants surveyed now add a surcharge when customers pay by credit card, with new businesses and restaurants doing it most often. A year earlier, J.D. Power put the figure at 34 percent, as reported by Digital Transactions.
That near-flat number says something about where we are. The rush to adopt is leveling off, and the hard part now is running these programs correctly. In my work with restaurants and auto shops, merchants often ask about dual pricing before we bring it up. Many already run a program they don't fully understand, often set up by a rep who treated "cash discount" and "surcharge" as two names for the same thing.
They are not the same thing. The difference decides which card brand rules apply, which states allow the program, and what the merchant has to post on the wall and print on the receipt. It also affects the customer. In the same J.D. Power study, 32 percent of merchants said customers occasionally or frequently cancel a purchase when a surcharge is added.
Two programs, two rulebooks
A surcharge starts with the regular price and adds a fee when the customer pays by credit card. A cash discount, or dual pricing, treats the card price as the regular price and offers a lower price for paying another way, usually cash
The framing matters. Under the Durbin Amendment (15 U.S.C. 1693o-2), card networks cannot stop merchants from offering a discount for cash, checks, debit or credit, as long as the discount is offered to all buyers, clearly disclosed and does not vary by issuer or network. Several states draw the same line. Massachusetts, Connecticut and Maine prohibit surcharges but expressly allow discounts from the regular price.
The catch is that a discount has to be a real discount. If the posted price is the cash price and the card customer pays more at the register, regulators will see a surcharge, whatever the receipt line is called.
What surcharging requires
Visa caps credit card surcharges at the lesser of the merchant's discount rate or 3 percent, according to its U.S. Merchant Surcharge Q&A. The merchant must notify its acquirer at least 30 days before starting, and the surcharge must be disclosed at the point of entry, at the point of sale and on every receipt. Visa also says it can fine the acquirer of a merchant that surcharges improperly.
Mastercard's published cap is the lesser of the merchant's cost of Mastercard credit acceptance or 4 percent, with disclosure at the point of interaction and the dollar amount on the receipt. Mastercard has historically required merchants to register their intent to surcharge. As of this writing, its website says it is not requiring that registration while it updates its surcharge rules.
In practice, a merchant accepting both brands should plan around 3 percent or its actual cost, whichever is lower.
Most important: no surcharges on debit or prepaid cards. Both networks prohibit it, including debit cards run without a PIN. A merchant whose terminal cannot reliably tell credit from debit should not be surcharging.
The state map keeps moving
State law sits on top of the brand rules, and it keeps changing. Colorado allows a surcharge of up to 2 percent, or up to the merchant discount fee, with statutory sign wording, a separate receipt line and no surcharge on cash, check, debit or gift card payments.
Oklahoma ended its ban on Nov. 1, 2025, under SB 677. Surcharges there are capped at 2 percent or the merchant's actual cost, whichever is less, with notice at the point of entry and point of sale. New Jersey caps surcharges at the merchant's actual processing cost and requires advance disclosure.
New York, since Feb. 11, 2024, requires merchants who surcharge to post the total credit card price, not just a percentage, and caps the surcharge at what the card company charges. The Department of State's guidance says a wall sign announcing a fee, or receipt-only line items labeled "service fee" or "non-cash adjustment," are not enough. Clearly displaying both the cash and the card price is acceptable.
California is less settled. Its surcharge statute has been litigated, and under the state's hidden-fees law, the Attorney General says a card fee must be built into the advertised price if the business accepts only cards. I am not a lawyer, and none of this is legal advice. Check the current rule in your merchant's state before you board them.
What reps should tell merchants
Start with the price the customer sees first. In a cash discount program, the shelf tag, menu or quote should show the card price, or both prices side by side. The receipt should show the discount for cash, not a fee for the card.
Signage is not optional. Post it at the entrance and at the register, put it on the checkout page online and have staff say it on phone orders. Use the wording the state requires, if it has any.
Keep the math honest. In my view, a dual pricing differential should bear a reasonable relationship to what the merchant pays to accept cards. In cost-capped states like New Jersey, New York and Oklahoma, a surcharge above cost is a violation regardless of brand rules.
Mistakes I keep seeing
Following are common mistakes I see:
- The cash price on the menu with a surprise card total at checkout. That is a surcharge in disguise.
- Surcharging debit cards because the terminal was never configured to tell credit from debit.
- A 4 percent surcharge on Visa. Visa's cap has been 3 percent since April 2023.
- Surcharging in Connecticut, Massachusetts or Maine because a previous rep said a "service fee" label made it fine.
- Signs that are missing, too small or out of date after a price change.
What comes next
The proposed Visa and Mastercard merchant settlement, which received preliminary court approval in June 2026, would change surcharge rules if finally approved. It would allow surcharging at the brand or product level, up to the lesser of 3 percent or the merchant's cost of acceptance, regardless of how the merchant treats other card brands.
A final approval hearing is scheduled for Nov. 16, 2026, and Walmart and several trade groups have objected. Mastercard's revised surcharge rules are also pending. Until changes actually take effect, sell to today's rules.
Adoption is no longer the story. Execution is. The merchants who do best with dual pricing have boring programs: honest prices, clear signs and clean receipts. Our job is to set them up that way from day one. 
David Hernandez is the owner of Pine Payments, an independent sales organization based in South Florida that helps merchants set up cash discount and dual pricing programs, including pricing displays and customer disclosures, and works with merchants in English and Spanish. Reach him at ddavid@pinepymt.com or 786-383-1656.
Notice to readers: These are archived articles. Contact information, links and other details may be out of date. We regret any inconvenience.
