Kansas Credit Card Surcharge Laws

Credit card surcharge laws in Kansas have changed quite a bit over the years—with the most recent iteration going into effect for January 2025.

Whether you’re a consumer who’s worried about being ripped off or you’re a merchant who wants to stay compliant, this guide will explain everything you need to know about the credit card surcharge laws in Kansas.

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

Is Credit Card Surcharging Legal in Kansas?

As of January 1, 2025, it’s legal for merchants in Kansas to add a surcharge fee on credit card transactions—so long as through a clear and conspicuous notice to the consumer prior to the transaction.

The notice can be at the point of sale or at the point of entry to a brick-and-mortar establishment. 

This applies to any person or retailer in the state of Kansas selling goods or services.

The new law comes from Kansas House Bill 2247, which amends Kansas Statute 16a-2-403.

Can Businesses Legally Add a Surcharge Fee to Debit Card Transactions in Kansas?

No, debit card surcharging is illegal in all 50 states—including Kansas.

This federal law governing debit card surcharging is part of the Durbin Amendment to the Dodd-Frank Reform and Consumer Protections Act. 

Federal law also restricts issuers from charging an interchange fee that exceeds 0.05% + $0.21 per debit card transaction. (Meaning it’s cheaper to process debit card payments, and merchants shouldn’t need to add a surcharge fee).

What is the Maximum Allowable Surcharge Fee in Kansas?

4% is the maximum allowable surcharge fee in Kansas, although this comes from the Fed and not directly from the state. 

Here’s a more in-depth explanation:

Kansas state law does have a cap on how much merchants can charge customers when surcharging credit card transactions. There’s no mention of a dollar fee limit or a percentage cap.

So merchants in Kansas will have to default to federal law in this scenario.

The Fed restricts credit card surcharging to a maximum—which is the same surcharge law for all 50 states—and that’s where the 4% cap comes into play. 

How Surcharging Laws in Kansas Have Changed Over Time

The history of laws relating to credit card surcharges in Kansas has taken a unique path. Here’s a quick summary of what happened:

• Kansas originally passed a no-surcharge statute in 1986—effectively banning merchants from adding a surcharge fee to credit card transactions statewide.
• In 2021, Federal Courts ruled that the existing surcharge laws in Kansas were in violation of the First Amendment.
• Declaring the statute unconstitutional at the federal level effectively repealed the surcharging ban in Kansas. 
• Introduced, passed, and signed into law by Kansas Governor Laura Kelly in 2023, HB 2247 goes into effect on January 1, 2025.
• This latest version of the surcharging law in Kansas officially makes it legal to surcharge credit card transactions as long as notice is clearly and conspicuously displayed to customers at the point of sale or point of entry. 

This mix of state laws, federal laws, repeals, and new legislature ultimately makes it legal for merchants in Kansas to add a surcharge fee to credit card transactions. 

Surcharging vs. Cash Discounts in Kansas

The old surcharge laws in Kansas (which actually banned surcharging), allowed merchants to offer a cash discount. 

For example, merchants weren’t legally allowed to charge a 4% surcharge for customers paying by credit card. But they could price an item at $104 and give a 4% discount to customers paying by cash. 

Under this old Kansas law, any extra price that increases the regular price would be considered a surcharge and illegal. 

One aspect of the lawsuit against the state of Kansas was directly tied to the distinction between cash discounts and surcharging—as it effectively resulted in the same thing for the customer.

A Federal court ruled that the state was unable to show that the surcharging ban was in the state’s interest to lower credit card debt and encourage cash payments from customers.

Merchants in Kansas can still offer cash discounts if they choose to do so. But both credit surcharging and cash discounts are legal in the state of Kansas now. 

Read More: Surcharging vs. Cash Discounts in Credit Card Processing

Final Thoughts: Should Merchants in Kansas Impose a Surcharge Fee on Customers Paying by Credit Card?

Passing merchant fees to your customers may seem like a quick and easy way to help offset the rising costs associated with accepting credit cards. 

But if you’re not careful, surcharge fees can have the opposite effect that you originally intended. 

A recent study found that 71% of consumers are avoiding businesses that charge them extra to pay by credit card. So in an effort to save money, businesses can actually lose customers altogether by charging them extra fees. 

Think about it this way. Let’s say your average customer spends $1,000 per year at your business. You could potentially add a 3% surcharge and get an extra $30 from them to help offset your processing costs. 

But is that $30 worth the risk of potentially losing $1,000 in sales? I personally don’t think so.

This is ultimately a decision that you need to make internally, and make sure that you consult with an attorney before implementing any surcharge programs.

If your payment processing costs are rising and you don’t want to surcharge your customers, contact our team here at MCC for alternative options. We can help lower your cost of acceptance without switching processors.