Mississippi has one of the most unique approaches to credit card surcharging in the US. While private businesses are free to add surcharge fees to credit card transactions, the state has specifically prohibited municipalities, state agencies, and counties from doing the same.
This is the complete opposite of what you’ll find in other states.
But even in the situations where surcharging is legal, merchants in Mississippi still have certain rules they must follow to remain compliant. Read on for the full scoop.
Disclaimer: This information is for reference only. It’s not legal advice, and you should consult with an attorney to verify local laws before implementing a surcharge.
Is Credit Card Surcharging Legal in Mississippi?
Yes, it’s legal for private businesses to add surcharge fees to credit card transactions without any state-imposed restrictions. This means that businesses in Mississippi can default to federal regulations, allowing credit card surcharge fees up to 4% of the transaction amount.
Here’s a quick summary of Mississippi’s surcharge laws:
- Surcharging is legal on credit card transactions.
- Debit card surcharging is illegal (as it is nationwide).
- Counties, municipalities, and state agencies in Mississippi are not allowed to surcharge under state Code Section 17-25-1.
- Other federal guidelines and card network rules still apply.
So a local restaurant or hardware store in Mississippi is legally allowed to surcharge customers paying with a credit card. But residents can’t be charged an extra fee when paying taxes or applying for a business license.
Mississippi Takes the Opposite Approach With Government Surcharges
For private businesses, Mississippi’s surcharge laws are relatively straightforward. But here’s where Mississippi really stands out from the rest of the country.
In most states that allow surcharging, you’ll find specific laws that permit counties, municipalities, and state agencies to add surcharge fees when residents pay taxes, fines, fees, and other government receivables with a credit card.
We even see these types of laws in states that don’t have any legislation defining if and how surcharges can be applied with private businesses (which generally makes it legal). They still go out of their way to explicitly state that surcharges for governments are allowed.
Mississippi does the exact opposite.
According to Section 17-25-1 of MS Code, government entities cannot charge extra when residents choose to pay with credit cards, debit cards, or other forms of electronic payment instead of cash or check.
This restriction applies to:
- Property tax payments
- Traffic fines and court fees
- Business license fees
- Utility payments to municipal services
- Etc.
However, this restriction does not affect private businesses. It only applies to public sector payment policies.
Federal Regulations and Card Network Rules Still Apply to Mississippi Merchants
Even though Mississippi doesn’t impose state-specific surcharge restrictions, businesses still need to comply with federal guidelines and card network rules.
This means:
- Surcharges can’t exceed 4% of the transaction amount (federal maximum).
- Visa caps surcharges at 3%, which effectively becomes your limit, as the card networks require equal treatment across all cards.
- Surcharge fees can’t exceed your actual cost of acceptance (meaning you can’t profit from surcharges).
- It’s illegal to surcharge debit cards and prepaid cards (federal law).
- You must clearly disclose surcharges to customers before they complete the transaction.
- Card networks require 30 days advance notice before you start surcharging.
Violating federal surcharge laws is obviously more serious than card network violations. Breaking Visa or Mastercard’s rules isn’t technically a violation of the law.
However, the card networks can still slap you with hefty fines and penalties, and potentially revoke your right to accept their cards altogether for egregious violations or repeat offenses.
Learn More: Surcharge Laws in All 50 States Explained
Surcharge Compliance Steps for Mississippi Businesses
Just because it’s legal to surcharge credit cards in Mississippi, it doesn’t mean you can start adding surcharge fees without proper preparation.
We don’t recommend surcharging. But if you want to proceed with this, here’s what you need to do:
First, notify the card networks at least 30 days before you start. Visa, Mastercard, Amex, and Discover all require advance notice. Contact your processor as well and check the terms of your merchant agreement for additional notification requirements.
Next, update your payment systems and procedures to ensure you properly identify credit vs. debit transactions. If you accidentally surcharge a debit card you’ll be breaking federal laws and potentially facing serious penalties.
You’ll also need to post clear signage. If you operate at a physical location, customers should be informed about surcharge fees at the point of entry and at the point of sale. And for online businesses, the surcharge information should be disclosed on payment screens prior to checkout.
Finally, ensure surcharge fees appear as a separate line item on all receipts and invoices. Surcharges need to be clearly labeled, transparent, and can’t be buried in the total.
How to Report Illegal Surcharging in Mississippi
If you’re a consumer in Mississippi and suspect a business is illegally surcharging transactions, you can file a complaint directly with the state’s Attorney General Consumer Protection Division at (601) 359-3680.
Merchants can be reported for:
- Surcharges that exceed 4% of the transaction.
- Surcharge fees on debit cards or prepaid cards.
- Failing to properly disclose surcharge fees before checkout.
- Using surcharges to generate profits beyond actual processing costs.
- Hiding surcharge information or disguising fees.
While we don’t offer any consumer services here at MCC, we’d still like to hear about your experiences with surcharging in Mississippi. So drop a comment below and we’ll pass your feedback to local businesses we work with.
Final Thoughts
Mississippi’s approach to surcharging is pretty straightforward for private businesses. But prohibiting surcharges for government entities and public sector organizations is definitely unique compared to other states.
If lawmakers won’t even let the state surcharge residents, I wouldn’t be surprised to see stricter surcharge laws proposed in future. It’s a trend we’re seeing in other states that attempt to protect consumers from hidden fees.
And it’s one of the many reasons why surcharging is a bad idea for most businesses.
So before you rush into passing your costs along to your customers, you should carefully consider whether this is the right move for your company. Recouping 2-3% of your processing costs if you’re listing customers who don’t want to pay the extra fee out of principal.
There are alternative ways to reduce your credit card processing costs without passing the burden to your customers.
Contact our team here at MCC for a free statement audit. We’ll identify hidden fees, inflated rates, and savings opportunities before negotiating better terms with your existing processor. This means you can save money without switching providers, installing new equipment, or implementing surcharge programs that will only upset your customers.