When it comes to surcharging credit card transactions, Maryland’s laws are pretty straightforward (especially compared to the surcharge laws in other states).
That said, Maryland’s surcharge laws could be changing in the near future.
This guide has all the information you need to stay informed—including the laws right now and what might be different down the road.
Disclaimer: This information is for reference only. It is not legal advice, and you should consult with an attorney before implementing a surcharge. Rules are constantly changing, and you should verify the accuracy of surcharge laws directly with your state.
Is it Legal for Businesses to Surcharge Credit Card Transactions in Maryland?
Yes, credit card surcharges are legal in the state of Maryland. If merchants are applying a surcharge fee in Maryland, they must follow these rules to remain compliant:
- Surcharge fees cannot exceed 4% of the transaction amount.
- Surcharge fees must be disclosed to the customer prior to the sale.
- Surcharge fees must appear as a separate line item on receipts.
It’s worth noting that, similar to other states, Maryland clarifies that surcharges and convenience fees are not the same thing. Surcharges are a percentage of the sale and are charged for the privilege of using a card (to help recoup processing fees).
Convenience fees can only be charged when accepting credit cards in non-standard channels.
For example, let’s say a movie theater typically sells tickets in person through a box office. But if a customer wants to pay over the phone using a credit card, the theater could charge a convenience fee for this alternative method.
Is it Legal for Businesses in Maryland to Surcharge Debit Card Transactions?
No, debit card surcharging is illegal in Maryland. This is a federal law that applies to all 50 states.
In addition to debit cards, it also applies to pre-paid cards.
Surcharges can only be applied to credit cards.
Upcoming Changes to Maryland’s Surcharge Laws
Last year, Maryland legislators introduced HB1481 and SB0520, proposing amendments to Maryland’s consumer protection laws. These proposals were an attempt to limit credit card surcharges not to exceed the merchant’s cost of acceptance.
So while it’s legal for merchants to surcharge up to 4% of the transaction, a merchant that only pays 3% to accept credit cards would be capped at a 3% surcharge fee under these amendments.
However, these proposed bills did not become new laws.
It’s still important to be aware of this attempt, as it may not be the last time we see this in the state of Maryland.
Several other states have laws like this, prohibiting merchants from profiting on surcharge fees. So I wouldn’t be surprised to see lawmakers attempt to try this one again in the near future.
How to Report Illegal Surcharging in Maryland
If you believe a business in Maryland is illegally surcharging card transactions, you can file a complaint online directly with the state’s AG office.
Common violations would be surcharges that exceed 4% of the transaction or any surcharge on debit cards and prepaid cards.
Consumers can also drop a comment on this post to let us know how you feel about being charged a surcharge fee in Maryland. While we don’t offer any services for consumers, we still find this information insightful, and we’ll pass it along to our clients.
Should Maryland Businesses Surcharge Credit Card Transactions?
Just because surcharging is legal in Maryland, it doesn’t automatically mean that businesses should pass these fees to customers.
As we just discussed, laws can quickly change. Had HB1481 and SB0520 gone into effect last year, you could have been instantly forced to change your surcharge policy.
If you’re on the fence, we have some resources that can help you decide if surcharging is right for you:
- 9 Scenarios When Credit Card Surcharging Makes Sense
- 11 Reasons Why Businesses Should NOT Surcharge Credit Cards
You can weigh the pros and cons and decide for yourself.