Credit Card Surcharges in Missouri: Why Debit Card Fees Are Prohibited and Surcharging Is Riskier Than It Looks

A “3% card fee” sign looks like a simple way to recover processing costs. In practice, surcharging is a tightly regulated activity: it is flatly off-limits on debit and prepaid cards, banned or capped by statute in several states, and governed by card-network rules that carry fines and termination. Missouri businesses that surcharge casually take on legal and commercial risk that usually outweighs the fees they recover.

Swipe fees are real money. A business running $500,000 a year through card terminals can easily pay $12,000 to $15,000 in processing costs, and it is natural to want customers who pay by card to cover them. Payment processors now market “surcharge programs” and “cash discount” programs aggressively to small businesses, restaurants, contractors, medical practices, and professional firms. Many of those programs are sold as plug-and-play. They are not.

This article explains where the law actually stands, why surcharging a debit card is prohibited everywhere in the United States, what penalties a business can face at the federal, card-network, and state level, and why even a lawful credit card surcharge is often a poor business decision.

Surcharge Versus Discount: Why the Label Matters

A surcharge is an amount added to the regular price because the customer pays with a card. A discount is a reduction from the regular price for paying by cash, check, or another method. Economically the two can look identical, but the law treats them very differently. Federal law affirmatively protects discounts. The Truth in Lending Act, 15 U.S.C. § 1666f, bars card issuers from prohibiting a seller’s cash discount, and the Durbin Amendment to the Dodd-Frank Act, 15 U.S.C. § 1693o-2(b)(2), bars card networks from preventing discounts for cash, checks, debit, or credit, provided the discount is offered to all buyers and clearly disclosed. The same statute’s definition of “discount” expressly excludes any means of increasing the price. Surcharges receive no comparable federal protection.

The U.S. Supreme Court confirmed the significance of the label in Expressions Hair Design v. Schneiderman, 581 U.S. 37 (2017), holding that New York’s surcharge statute regulated how merchants communicate prices, which is speech, rather than the prices themselves. Since then, state surcharge laws have been tested under the First Amendment, and several have been amended or narrowed. For a business, the practical lesson is that how a price is posted and described can decide whether a program is lawful.

Debit Card Surcharges Are Prohibited

No business in the United States may add a surcharge to a debit card or prepaid card transaction. It helps to be precise about where that prohibition comes from, because it is often misdescribed.

• Card-network rules, nationwide. Visa’s published merchant requirements state that “debit and prepaid cannot be surcharged,” and that the prohibition applies even when a debit card is processed as a signature or “credit” transaction. Mastercard’s merchant surcharge rules likewise state that surcharges “are not allowed on Debit Mastercard or Mastercard prepaid cards.” Every merchant accepts these rules by contract through its merchant-processing agreement.
• State statutes. Several states prohibit surcharging debit cards by law, including Connecticut and Maine (which bar surcharges on both credit and debit) and Colorado, whose surcharge statute, C.R.S. § 5-2-212, excludes debit cards. Oklahoma’s 2025 law permits surcharges on credit cards only.
• Federal law. No federal statute contains a stand-alone ban on debit surcharges. The Durbin Amendment caps the interchange fees large banks may charge on debit transactions through the Federal Reserve’s Regulation II, which is a principal reason the networks prohibit merchants from passing a separate fee to debit cardholders. A business that hides or misrepresents a debit fee, however, can face federal exposure under Section 5 of the FTC Act, discussed below.

The most common violation is technical rather than intentional. Many terminals and online checkout pages apply a flat percentage to every card without identifying the card type, which means debit cardholders are charged a prohibited fee on every transaction. A compliant program must identify the card type (by its bank identification number) before the fee is applied and must exempt debit and prepaid cards automatically.

When a Credit Card Surcharge Is Lawful in Missouri

Missouri has no statute that prohibits or caps credit card surcharges; a 2013 bill that would have banned them did not pass. That does not make surcharging unregulated. A Missouri merchant must satisfy every one of the following conditions, most of which come from the card networks.

On top of those rules, every surcharge must be honest. Under the Missouri Merchandising Practices Act, RSMo § 407.020, it is unlawful to use deception, misrepresentation, an unfair practice, or the concealment or omission of any material fact in connection with the sale or advertisement of merchandise, which Missouri defines broadly to include services. A fee that is disclosed only on the receipt, labeled as a government or “convenience” charge when it is not, set higher than the actual processing cost while described as cost recovery, or applied to debit cards contrary to the posted policy is the kind of practice the MMPA reaches.

The Penalties

Card-network penalties

The networks enforce their rules through the merchant’s processor. Visa launched a direct surcharge-compliance program in 2024 that, as Payments Dive reported, uses mystery shoppers to identify merchants surcharging above the cap or surcharging debit cards, followed by warning notices and escalating fines. Merchant-processing agreements almost always pass those assessments through to the merchant. Continued violations can lead to the processor terminating the merchant account, and a merchant terminated for cause can be placed on the industry’s shared termination list, which makes obtaining a new processor difficult. Cardholders may also dispute improper fees through their card issuer, producing chargebacks.

Missouri penalties under the MMPA

• Attorney General enforcement. Under RSMo § 407.100, the Attorney General may obtain an injunction, restitution for affected consumers, and a civil penalty of up to $1,000 per violation. Where a fee is charged on every transaction, each transaction can be a violation.
• Private lawsuits and class actions. Under RSMo § 407.025, a consumer who suffers an ascertainable loss may recover actual damages, punitive damages in the court’s discretion, and attorney’s fees, and may sue on behalf of a class. The 2020 amendments require a showing that a reasonable consumer would have been misled, but small, uniform fees charged to thousands of customers are the classic fact pattern for consumer class actions.
• Criminal exposure. A knowing and intentional MMPA violation committed with intent to defraud is a class E felony under RSMo § 407.020.3.

Federal penalties

Section 5 of the FTC Act prohibits unfair or deceptive acts or practices, and the Federal Trade Commission has long treated hidden or misrepresented fees as deceptive. The FTC’s Rule on Unfair or Deceptive Fees, 16 C.F.R. Part 464, effective May 12, 2025, requires live-event ticket sellers and short-term lodging providers to include mandatory fees in the advertised total price; a card surcharge that a customer cannot reasonably avoid is treated as mandatory. Violations of an FTC trade regulation rule carry civil penalties that exceed $50,000 per violation after annual inflation adjustments. Businesses outside those two industries remain subject to Section 5 itself.

Penalties in other states

A Missouri business that sells online, ships to customers in other states, or operates locations across the state line must account for those states’ laws. The following are examples, not a complete survey.

A surcharge program is only as compliant as the terminal settings behind it. One misconfigured checkout page can charge a prohibited fee on every debit transaction the business processes.

Why Surcharging Is Usually a Bad Idea, Even Where It Is Legal

• The debit problem is hard to solve. Debit cards make up a large share of consumer card payments, and the fee must be suppressed on every one of them. Processors that apply a flat percentage to all cards put the merchant in violation from the first transaction.
• Multistate exposure. Online and phone sales reach customers in states that ban or cap surcharges, and the merchant is responsible for applying the right rule to each sale.
• The recovery is capped at cost. A lawful surcharge can only offset actual processing cost. Any amount above cost is a network violation and potentially deceptive, so there is no profit in the program, only risk.
• Customer reaction. Customers increasingly view card fees as junk fees. Lost repeat business and negative reviews often cost more than the fees recovered.
• Class-action economics. A small fee charged consistently to every customer is exactly the fact pattern that makes a consumer class action attractive to plaintiffs’ counsel.
• The rules are about to change. On June 9, 2026, the federal court overseeing the long-running interchange litigation granted preliminary approval to an amended Visa and Mastercard settlement that would lower credit interchange and give merchants new surcharging and card-acceptance options. Until final approval and new network rules are published, the current rules govern, and any program built today will likely need to be rebuilt.

Safer Alternatives

Professional firms, including law firms, face an additional layer of rules. Lawyers who pass card fees to clients must also satisfy the reasonableness and communication requirements of the rules of professional conduct and must keep processing charges from reducing funds held in trust. Any business in a licensed profession should confirm the rules of its own licensing body before adopting a surcharge.

Disclaimer: This article is for general educational purposes only and is not legal advice. Reading it does not create an attorney-client relationship with Haake Law Group, PC. Card-network rules, statutes, regulations, and court decisions change frequently, and the Visa and Mastercard settlement described above has not received final approval as of this writing. Violations can carry significant civil, contractual, and in some cases criminal consequences. Verify current requirements with your payment processor and the relevant agency, and consult a licensed attorney before implementing any surcharge or discount program.