Unlike other states that have complicated or conflicting surcharge laws, the credit card surcharge laws in Nebraska are relatively straightforward.
The short version—businesses in Nebraska can legally add surcharge fees to credit card transactions without violating state laws.
Read on for the full breakdown.
Disclaimer: This information is for reference only, and it does not constitute legal advice. Consult with an attorney for any legal-specific questions.
Are Surcharge Fees Legal in Nebraska?
Yes, credit card surcharging is legal in Nebraska. There are no state laws prohibiting this practice, which means businesses can implement surcharge programs to help offset the costs of accepting credit cards.
Whether you’re a merchant or consumer in Nebraska, here’s a quick summary of what you need to know:
- Surcharge fees are legal on credit card transactions.
- But surcharging debit cards or prepaid cards is illegal (this is a federal law).
- Merchants can default to federal guidelines if implementing surcharge fees.
- Card network rules still apply (even though these aren’t technically laws).
- Nebraska does have specific legislation about how state agencies and local governments can impose surcharges on electronic payments.
Nebraska’s hands-off approach to surcharging makes it easier for businesses to surcharge credit cards. But that doesn’t mean you can just do so blindly or haphazardly. There are still lots of federal regulations to follow, and you’ll need to comply with card network requirements to avoid other penalties.
Federal Laws and Requirements That Apply in Nebraska
If you’re thinking about setting up a surcharge program in Nebraska, you’ll need to understand how these charges are governed at the federal level.
First and foremost, the federal government says that the maximum allowable surcharge is 4% of the transaction amount.
You also need to clearly disclose any surcharge fees with signage at the point of entrance and the point of sale. Disclosures should also be on menus, price sheets, on the checkout page for ecommerce transactions, and itemized as a separate line on receipts.
There’s also a new FTC junk fee law that has additional stipulations for how merchants disclose surcharge fees, including:
- Include all mandatory fees (including surcharges) in the total price upfront.
- Make sure the total price is displayed more prominently than other pricing (except for taxes and shipping).
- Explain the reason for additional charges without misleading your customers.
The whole idea behind these laws is for consumer protection. You’re allowed to surcharge, but you can’t pull a bait and switch on your customers and surprise them with extra fees at checkout. They should fully understand what they’re purchasing and if extra charges will be applied before they decide to make the purchase.
Read More: Credit Card Surcharge Laws by State
Card Network Rules Still Apply to Nebraska Businesses
Card networks similarly require clear disclosure. You’ll also need to provide each network with written notice of your surcharge program (typically 30 days prior to implementation).
Visa, Mastercard, American Express, and Discover all have unique rules that are roughly 80% overlapping information with a few differences that will ultimately shape your surcharge program overall.
For example, Visa caps surcharges at 3% (which is lower than the federal limit).
American Express says that surcharges need to be applied equally across all card brands. So you couldn’t only surcharge Amex cards, and not surcharge Visa and Mastercard.
Complying with these rules will effectively cap your maximum surcharge fee at 3% since that’s what Visa allows and you need to treat all credit cards equally. While this technically wouldn’t be breaking any laws, you can still be fined by the card networks.
Nebraska Surcharge Laws For State Agencies
Interestingly, Nebraska actually has a law that explicitly authorizes its own state agencies to impose surcharges on electronic payments.
According to Nebraska Revised Statute 81-118.01, state officials and agencies can add surcharge fees or convenience fees to credit card payments to offset processing costs.
The law says that if someone chooses to pay a state agency and there’s a surcharge imposed, the charge is deemed to be voluntary and is not refundable.
This legislation also says that the fee cannot exceed the charges imposed by the banks, card networks, or processors—which essentially says that the agencies can’t profit on the surcharge fees, they can just recoup costs.
How to Report Illegal Surcharging in Nebraska
While surcharging is legal, there are still ways that businesses in Nebraska can violate federal rules or card network guidelines. Common violations include:
- Surcharging debit cards.
- Surcharges exceeding 4% of the transaction amount.
- Failing to properly disclose surcharge fees.
- Hiding surcharges and not providing proper itemization on receipts.
Consumers who encounter any of these violations can file a complaint online directly with the state’s Attorney General’s office.
You can also drop a comment on this page to let us know if you’re encountering surcharge fees in Nebraska and how you feel about them (whether they’re legal or illegal).
Other Considerations to Keep in Mind
Just because it’s legal, adding a surcharge fee to credit card transactions is far from a no-brainer decision for Nebraska businesses.
Here are some additional resources to help you decide:
- Pros and Cons of Surcharging
- Scenarios When Credit Card Surcharging Makes Sense
- Reasons Why Businesses Should NOT Surcharge Customers
- 9 Surcharging Alternatives
At the end of the day, surcharge fees just pass part of your operating expenses to your customers. In a state like Nebraska where consumers are price-sensitive and businesses are part of the community, passing your costs to them may do more harm than good.
Most businesses don’t want to lose their long-time customers over a dollar. You’ll be better off just increasing your prices instead of nickel-and-diming your customers at checkout.
If credit card processing fees are eating into your costs, you have other options.
Contact our team at MCC for a free audit. We’ll help you save money on payment processing—without switching providers or surcharging your customers. We negotiate directly with your current processor to ensure you’re getting the best possible deal.