Merchant Surcharge Program
Overview
A Merchant Surcharge Program allows businesses to pass on credit card processing fees to customers who choose to pay with credit cards. When enabled, merchants can add a percentage-based fee (typically 1-3%) to credit card transactions, helping them recover the interchange fees and processing costs charged by card networks and payment processors.
The Run Payments API supports surcharging through our Payments API. Our system ensures that surcharges are only applied to eligible transactions (credit cards only, not debit) and automatically waives surcharges when required by regional restrictions. It is important to note that merchants remain responsible for proper disclosure to cardholders in order to maintain a compliant surcharge program.
Currently, surcharging features are only supported on the CardPointe Gateway.
Integration Requirements
Required Authorization Parameters
For card-not-present surcharge transactions, the cardholder’s zip code must be included in the authorization request to ensure cardholders in restricted territories are not surcharged.
- If surcharging is enabled, but no zip code is included in the authorization request, the transaction will be declined by the gateway.
- If the cardholders’s zip code matches a restricted location, the surcharge will be waived, and the transaction will be processed.
Response Fields
Refunds and Returns
- Same Card Recommendation: For refunds, always request that customers use the same payment card used in the original purchase. This ensures that the correct amount (including any surcharge) is properly refunded.
- Automatic Surcharge Handling: When processing a refund, the system automatically includes the proportional surcharge amount for the refunded transaction.
- Partial Refunds: For partial refunds, the system proportionally refunds the surcharge.
- For example: if refunding 50% of a $100.00 purchase with a 3% surcharge ($103.00 total), the refund will be $51.50 (50% of purchase + 50% of surcharge).
- Mixed Card Type Issues: Using different card types between purchase and refund can lead to discrepancies:
- For example: If a customer makes the $100.00 purchase above with a credit card (incurring the $3.00 surcharge) but receives a refund to a debit card, the customer may only receive $100.00 back since debit transactions are not eligible for surcharges.
- Void Transactions: When voiding a transaction, the entire amount including surcharge is reversed.
Surcharge Eligibility
Eligible Transactions
- Credit card payments (including recurring payments)
Restrictions
- Not applicable to debit cards (including Signature, PIN, PINless, and Prepaid)
- Not applicable in restricted regions (for card-not-present transactions)
- Not applicable to partial authorizations
- Not compatible with AMEX ESA or Discover Direct programs
- The surcharge rate percentage cannot vary per transaction (one fixed rate)
Restricted Regions
- States: Connecticut (CT), Massachusetts (MA)
- Territories: Puerto Rico
- Armed Forces Locations: Domestic (AF), EU (AE), Pacific (AP), US (AA)
Please note that merchant locations within these regions cannot enroll in the Merchant Surcharge Program or add surcharge to their transactions.
Cardholders that reside in these locations are exempt from surcharging for card-not-present (CNP), e-commerce, mail, telephone, and recurring transactions. The gateway will disable surcharging at the transaction level when a cardholder’s postal code matches one of the restricted regions.
Compliance Requirements
Signage & Disclosure
As a merchant who is enrolled in the Merchant Surcharge Program, you are responsible for maintaining compliance with your processor as well as the Card Brands. Please note the following:
General Disclosure Requirements
Disclosure Requirements
- Mandatory Notices: Display surcharge disclosures at all customer touchpoints, including entry points and transaction locations.
- Update in-store signage and in-app messaging to clearly indicate surcharges on applicable transactions. Reference Visa’s example disclosure signage for guidance.
Additional Compliance Considerations
- Business-Specific Requirements: Your business type and location may trigger additional disclosure obligations. Review Card Brand rules and state laws thoroughly to determine applicable requirements.
- Legal Responsibility: You bear sole responsibility for creating compliant disclosures under all applicable laws.
- Price Advertisement Regulations: Certain states prohibit advertising one price and adding a surcharge at checkout when customers select credit card payment. These jurisdictions require:
- Clear posting of the higher credit card price for each product or service
- Display of the exact dollar and cents amount for each item
- Transparent communication of the higher credit card pricing across all customer touchpoints
New York Merchants
New York-Specific Requirements
- New York state law mandates merchants display the maximum possible price for products, inclusive of any surcharge fees.
- For complete regulatory information, consult the New York State Senate website.
Colorado Merchants
Colorado-Specific Requirements
- Colorado merchants must comply with all card brand regulations, applicable laws, and specific state legislation, including Colorado Senate Bill 21-091 when implementing a surcharge program.
- The following disclosure must be presented by all Colorado surcharge merchants:
Colorado Disclosure
TO COVER THE COST OF PROCESSING A CREDIT OR CHARGE CARD TRANSACTION, AND PURSUANT TO SECTION 5-2-212, COLORADO REVISED STATUTES, A SELLER OR LESSOR MAY IMPOSE A PROCESSING SURCHARGE IN AN AMOUNT NOT TO EXCEED THE MERCHANT DISCOUNT FEE THAT THE SELLER OR LESSOR INCURS IN PROCESSING THE SALES OR LEASE TRANSACTION. A SELLER OR LESSOR SHALL NOT IMPOSE A PROCESSING SURCHARGE ON PAYMENTS MADE BY USE OF CASH, A CHECK, OR A DEBIT CARD OR REDEMPTION OF A GIFT CARD.
Surcharge Endpoint
Prior to completing a transaction, you can use the surcharge endpoint to check if a tranasction will incur a surcharge.
- Method: POST
- URL: https://javelin.runpayments.io/api/v1/surcharge
- Required Headers: Content-Type (application/json), Authorization (Bearer Token)