by Matt Rej
Surcharge signs are everywhere now. And unless you live in one of the states where surcharging is banned entirely, there’s a good chance you’ve encountered a surcharge fee.
Whether it be at a restaurant, dentist’s office, mechanic, or coffee shop, over the last few years this practice went from something that was rarely seen to somewhat expected.
So as a business owner fighting rising credit card processing rates, it may seem logical to impose surcharge fees of your own. After all, everyone else seems to be doing it.
But now stop and think about the places you’ve never seen a credit card surcharge fee:
- Costco
- Walmart
- Target
- Kroger
- Home Depot
- McDonald’s
- Apple
- Amazon
- Starbucks
I’ve gone looking for the exception among the largest companies in the US, and haven’t found one (if you do, please reach out and let me know).
That’s obviously not an oversight or missed opportunity. Every single company on that list has run the numbers, and they all landed in the same place.
Companies With the Most to Gain From Surcharging Still Don’t Do It
If surcharging were a clean way to recover processing costs, these are the businesses that would have adopted it first.
Walmart alone moves hundreds of billions of dollars per year in card volume, with net profit margins in the low single digits. Costco also runs on razor-thin retail margins funded by membership fees.
Recording even a single point on card sales would be a huge talking point on the earnings calls from either of these brands. Every company on this list has a finance team that could tell you tomorrow exactly what a 3% surcharge would return.
And they hate processing fees as much as you do. Walmart has been to federal court alongside organizations like The National Retail Federation to fight interchange for decades. They’re spending plenty in legal fees here, so it’s not like they’re just quietly accepting processing fees as a cost of doing business.
All of these companies have the volume, incentive, lawyers, and motive to surcharge credit cards. And yet they still don’t do it.
One common myth is that the big players have negotiated their rates down so low that surcharging isn’t worth the trouble. But that can’t be true.
Fractions of a percentage still translate to tens of millions of dollars for these guys. They wouldn’t leave this money on the table if they could easily recoup it by passing costs to their customers.
So it flips the question. Instead of asking yourself why so many small businesses are surcharging, you should ask what the largest companies in America have concluded that everyone else hasn’t.
They Were Handed More Surcharging Power, and Fought Against It
The Visa and Mastercard interchange settlement got preliminary approval from US District Judge Brian Cogan on June 9, 2026.
Among other things, the revised settlement loosens the honor-all-cards rule and expands surcharging capabilities for businesses. So a merchant could eventually surcharge at the product level and only target the most expensive premium rewards cards instead of every credit card accepted.
This is a meaningfully better version of what’s in place right now (even if it might be challenging to implement).
But retail giants still objected to this deal. Walmart filed a formal objection and argued that the settlement pushes more work onto merchants that the networks should be solving. Other large brands told courts that building surcharge and discount programs would burden their businesses.
They were offered expanded surcharging rights, and their response was to tell a federal judge it wasn’t worth what it would cost them to use.
Why Big Businesses Don’t Surcharge
There’s no single reason. There are several different angles to consider here, but even just one of them would be enough for them to avoid it. And collectively, it’s an easy decision.
Legal Hurdles
Surcharge laws vary significantly from state to state. Some ban it outright, others cap it below what the network allows, and several more limit you to your actual cost of acceptance regardless of what the networks say.
There are even states that have surcharge bans sitting in a statute that federal courts have found unconstitutional.
National retailers have to manage complex answers in 50 different states. Their corporate legal departments price this uncertainty and ultimately advise against it.
Compliance Requirements
Beyond what’s “legal” merchants also have to deal with card network requirements.
Visa caps surcharges at 3% or your merchant discount rate. Mastercard allows 4%, but if you accept both then 3% is your practical ceiling. Though your actual cost of acceptance is the real one because you can never surcharge above what it costs to accept a card.
You also have to deal with proper disclosure requirements, written notice to your acquirer, and rules where a single misstep could land you with hefty non-compliance penalties.
Operational Difficulty
Surcharge programs need to be applied consistently across every register and POS.
What happens when a customer pays with a debit card instead of a credit card? You can’t surcharge debit cards, but for contactless transactions, self-checkout, or any instance where an employee isn’t physically inspecting the card being used (almost everything now), how can you determine whether the fee is being imposed correctly?
Then there’s the franchise issue. Take McDonald’s as an example. These are independently owned, which means there are thousands of operators with different merchant accounts and processors. Corporate can’t just flip a switch and surcharge. It would need an identical program configured across every location in every state.
Customer Satisfaction
One thing that big operators measure with more precision than almost everyone else is their customer acquisition cost and what that customer is worth over their lifetime.
When you look at both of these numbers, the surcharge tradeoff stops being close.
Recovery is capped at your cost of acceptance (call it 2-3%). But the downside is uncapped because it runs through customers who quietly stop coming and never tell you. All of these companies have realized that it’s not worth losing a customer over their lifetime for such a small recovery.
Competitive Advantage
A surcharge turns your processing costs into a published price. It shows up on the checkout screen, receipt, and next to the total where customers can quickly compare it.
If consumers can avoid this fee by going elsewhere, that’s exactly what they’re going to do (the data backs this up).
Same holds true on a local level. If a customer can order a pizza without paying a 3% surcharge fee from another restaurant down the street, they’ll favor that over your location.
If This Problem Could Have Been Solved, They Would Have Already Solved It
This is the entire argument that I want any business owner to understand.
If surcharging could be run cleanly at scale, these companies would be doing it.
Between their in-house payments teams, legal counsel, and budgets, it’s an understatement to say they have the resources to put these systems in place.
But they’ve all run the analysis and passed on it. Then they were offered a stronger version in 2026 and passed on that too (in front of a federal judge).
Think about how the same decision gets made at a small or midsize company.
Is my competitor surcharging? Ok, maybe I should too.
My processor says I can easily surcharge. Ok, let’s do it.
But neither of these solve any of the problems discussed above. You’re still subject to legal requirements, network rules, operational hurdles, and run the risk of losing customers that were so hard to acquire in the first place.
It’s also worth noting that your processor’s input is largely irrelevant because they have everything to gain with no risk. If your surcharge program is deemed to be illegal or non-compliant, you’re 100% on the hook.
While your processor gains from higher total transaction sizes and gets to quietly increase your rates because you’re passing costs along to the consumer.
Take a Page From the Big Business Playbook
It’s always a good idea to follow established paths to success.
That’s why nearly everyone selling online took steps to mirror Amazon’s checkout and two-day delivery expectation. It works, and it’s been proven at scale.
Your business can take the same approach here and model your decision on whether or not it makes sense to surcharge based on what the biggest companies in the US have collectively agreed on: it just doesn’t make sense, and it’s not worth it.
So what can you do instead to deal with rising processing costs?
Again, follow the playbook used by companies collectively processing trillions of dollars every year. Go straight to the source. It’s all about negotiating better rates and optimizing what you can control.
It’s unlikely your business will ever be in front of federal courts arguing against interchange. So that’s the part that’s essentially out of your hands.
The part you have a say in is how much your processor charges you. Pick up the phone and talk to them. Identify the bogus fees on your statement that you shouldn’t be paying. Fight back when they attempt to raise your pricing.
While you may not have the same volume to leverage as a company like Costco or Starbucks, your processor still doesn’t want to lose your business.