Oklahoma Credit Card Surcharge Laws Explained (2024)

Credit card surcharge laws in Oklahoma can be confusing for both merchants and consumers alike. That’s because Oklahoma has state-specific laws prohibiting surcharging credit card transactions—but federal courts have essentially deemed those laws unenforceable. 

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 Oklahoma?

Technically, surcharging credit card transactions in Oklahoma is prohibited. 

According to Section 14A-2-417 of the Oklahoma Consumer Credit Code, “No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card or debit card in lieu of payment by cash, check, or similar means.” 

Section 14-A-211 does allow cash discounting—meaning that merchants can legally charge a customer less if they choose to pay by cash or check. Cash discounts are not considered credit card service fees in Oklahoma. 

However, federal courts have invalidated credit card surcharge laws in other states, deeming them to be unconstitutional. And after a Texas surcharge law was ruled to be unenforceable by a federal judge, Oklahoma’s attorney general issued an opinion that Oklahoma’s surcharge laws would also be unenforceable if it’s interpreted the same way. 

Is it Legal to Surcharge Debit Card Purchases in Oklahoma?

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

Card brands (like Visa, Mastercard, etc.) also prohibit businesses from surcharging debit cards and prepaid cards. Again, this is enforced at a national level. 

Surcharging vs. Cash Discounts in Oklahoma

One of the reasons why Oklahoma’s surcharge laws are confusing is because it prohibits one thing but allows another. To make matters even trickier, it’s the phasing between surcharging and cash discounts that the Oklahoma attorney general says would be unenforceable by federal courts.

Let’s break this down a bit more so you can understand what I mean.

Oklahoma’s consumer credit code does allow cash discounts—which means merchants can lower the price of goods or services if a customer chooses to pay by cash, check, or similar means. 

But it prohibits surcharging—which means merchant’s can’t increase the price of goods or services if a customer chooses to pay with a credit card over cash, check, etc.

For example, let’s say you’re running a restaurant and want to implement a 3% surcharge. You can’t charge $10.30 for a $10 burrito if a customer pays with a credit card. This increases the cost of an item, which is considered a surcharge and, therefore, illegal in Oklahoma. 

However, you could change the menu price of your burritos to $10.30 and then offer a 3% discount to anyone who pays with cash, check, or debit card. This effectively gets you the price you want for a credit card transaction but without a surcharge fee.

We’ve seen similar laws get overturned by federal courts in other states on first amendment grounds. It has nothing to do with the price itself, but rather the state restricting a company’s “free speech” of how it lists prices. 

Final Thoughts: Navigating Through Confusion in Oklahoma

Using a cash discount system instead of a surcharge fee is the safest option in Oklahoma. But you should still consult with a local attorney before you proceed with either of these.

Alternatively, you can just avoid surcharging altogether. While it would be nice to get back some of those merchant fees, there are plenty of other ways to save money on credit card processing—methods that don’t come at the cost of passing those expenses to your customers.

If you think you’re paying too much for payment processing, contact our team here at MCC for a free audit. We can help you save money on processing fees without having to switch processors or change any of your operations.