Everything You Need to Know About Credit Card Surcharge Laws in Florida

Florida’s credit card surcharge laws are a bit confusing for merchants and consumers alike. If you run a quick search for this info on the web, you’ll see quite a bit of conflicting information—with some sources saying it’s illegal and other sources saying it’s legal.

We’re here to set the record straight once and for all so you have a clear-cut answer.

Disclaimer: This information is for reference only, and it does not constitute legal advice. Consult with an attorney with any legal-specific questions.

Is It Legal to Surcharge Credit Card Transactions In Florida?

Technically, it’s illegal to surcharge credit card transactions in Florida. But federal courts have overruled this law, allowing merchants to surcharge credit card transactions without penalty.

Let’s go through this step-by-step to ensure you fully understand what this means.

Under Florida State Law, It’s Illegal to Surcharge Credit Card Transactions

Florida statute 501 Section 0117 clearly states that sellers are prohibited from imposing a surcharge on credit card transactions. 

This is a consumer protection law that defines a surcharge as any additional amount imposed at the time of a sale in which the seller charges the buyer for the privilege of using a credit card to pay for something. 

There are some exceptions to the law:

• Convenience fees charged on tuition at private schools are exempt.
• Cash discounts are not considered a surcharge and, therefore, legal.

Violating Florida’s credit card surcharge law is considered a second-degree misdemeanor, which carries a fine of up to $500 per violation and up to 60 days in prison (according to Florida statute chapter 775, section 082 and section 083).

However, Federal Courts Have Ruled Florida’s Surcharge Law as Unconstitutional—Essentially Voiding the Law

Everything I just stated above is effectively null and void. 

That’s because an Eleventh Circuit federal court deemed this state law unconstitutional in November 2015, citing a breach of the First Amendment.

The case of Dana’s Railroad Supply v. Attorney General, Florida, involved four businesses that filed a lawsuit against the state after receiving cease and desist letters from Florida’s AG’s office. The court determined that the wording of Florida’s surcharge law violated a merchant’s free speech under the First Amendment.  

They essentially believed that the difference between a “surcharge” and a “cash discount” was semantics, and the result would end up being the same thing for the consumer. 

The court ultimately struck down the Florida state statute 501.0117 based on free-speech discrimination and reversed the lower court’s original dismissal of the case. 

This Means Merchants in Florida Can “Legally” Add a Surcharge Fee to Credit Card Transactions

In short, the 2015 federal ruling means that merchants can surcharge transactions without fear of penalty. 

This is still somewhat of a gray area because, technically, Florida statute 501.0117 still exists, and still prohibits surcharging. But the federal courts have essentially told the Florida Attorney General’s office that this statute is unenforceable.  

So it’s tough to say that it’s “legal” to surcharge credit card transactions in Florida. This technically isn’t true. 

Instead, we should say that merchants are “allowed” to add a surcharge fee if customers pay with a credit card and won’t be penalized (even though it’s “technically” illegal).

Maximum Allowable Surcharge Fee in Florida

Since Florida’s state law prohibits surcharging altogether, merchants will have to default to federal laws governing surcharges—which caps credit card surcharge fees at 4%.

However, card networks have different rules for surcharging that must be taken into consideration. 

For example, Visa’s surcharge rules say the fee cannot exceed 3% of the transaction. 

Federal law says that surcharges must be applied equally for all cards—meaning a merchant couldn’t surcharge Visa cards at 3% and Amex cards at 4%. 

Can You Surcharge Debit Transactions in Florida?

No, it’s illegal to surcharge debit cards in all 50 states. 

This is a federal law and has nothing to do with Florida’s surcharge laws, which only apply to credit cards. 

How to Report Illegal Surcharging in Florida

If you’re a Florida consumer that’s been charged a surcharge fee on a debit card transaction or a surcharge on a credit card that exceeds 4% of the transaction, you can report this directly to the state’s Attorney General office.

Here’s the link to file a complaint online. You can also print and mail your form to:

Office of Attorney General
State of Florida
The Capitol PL-01
Tallahassee, FL 32399-1050

Please note that filing a complaint or grievance does not necessarily entitle you to damages. You’ll need to consult with an attorney about that.

It’s also worth noting that email addresses are public records in Florida. So if you don’t want your email to be shared in a public records request, you should not submit the form online. Submit a written form or call Florida’s Office of Citizen Services at 850-414-3990. 

Florida Credit Card Surcharge Laws Compared to Other States

Florida’s surcharge laws are somewhat unique to other states. 

First of all, it’s basically legal to surcharge credit card transactions without restriction in 36 states. A handful of states have laws that restrict the amount that can be surcharged (like up to 1% in Illinois and up to 2% in Colorado). 

And there are just three states where surcharging is completely prohibited. 

Florida’s surcharge law most closely resembles Texas surcharge laws. Similar to Florida, Texas has laws prohibiting surcharging, but those laws were overturned by federal courts. 

We have a complete guide on credit card surcharge laws in all 50 states that you can reference for more information. 

Alternatives to Surcharging

72% of consumers say that surcharge fees give them a negative perception of the business that charges them. Furthermore, 40% of those with a negative view say they’re “highly likely” to look for competing merchants that don’t charge surcharge fees.

So just because surcharging is “allowed” in Florida, it doesn’t necessarily mean that you should do it.

Rather than losing your customers over 3% (just because you can), there are a few alternatives that you may want to consider:

• Offer a cash discount. This incentivizes customers to pay with cash, getting a discount on the advertised price that they’d pay if they used a credit card.
• Raise your prices to account for processing fees. Customers would rather see an all-in-price that’s higher, as opposed to seeing a surcharge when they pay. 
• Negotiate your processing rates. Most merchants don’t realize this, but payment processing fees are negotiable. So instead of passing along those fees to your customers, you can simply contact your processor and work out a rate reduction. 

If your processor isn’t budging and you need help negotiating your rates, contact our team here at Merchant Cost Consulting for assistance. We’ll negotiate those rates on your behalf so you can save money without switching processors.