Oregon provides a business-friendly approach to credit card surcharging. Merchants can follow federal guidelines without having to worry about state-level restrictions.
Unlike other states with complex regulatory frameworks or outright bans on surcharging, Oregon’s laws are much more straightforward for businesses and consumers alike.
That said, it doesn’t mean that merchants can just operate with impunity. There are still rules and regulations that must be followed if you’re planning to implement a surcharge fee on credit card transactions in Oregon.
Disclaimer: This information is for reference only, and it does not constitute legal advice. Consult with an attorney for any legal-specific questions.
Are Credit Card Surcharges Legal in Oregon?
Yes, credit card surcharging is legal in Oregon.
Oregon does not impose any credit card surcharging restrictions beyond federal guidelines.
- No specific Oregon statutes prohibit surcharges on credit cards.
- Debit card surcharging is illegal (federal law, Durbin Amendment).
- Government entities have explicit authority to surcharge (per ORS 825.502 and ORS 802.112).
Maximum Allowable Credit Card Surcharges in Oregon
Federal law limits surcharges to 4% of the transaction amount, which applies to all businesses imposing a surcharge fee in Oregon.
However, Oregon businesses cannot impose a surcharge fee that exceeds actual processing costs. So if your effective rate is 2.5%, you can’t have a 4% surcharge fee.
The federal government has this rule in place so that businesses can’t use surcharge fees as a profit center—they can only be used to recoup costs.
Card Network Limits
Each of the four major credit card networks has its own surcharge rules.
- Visa: 3% maximum
- Mastercard: 4% maximum
- American Express: Network-specific restrictions
- Discover: Must be applied equally across all card brands
If you apply all of the card network regulations, your surcharge fee will effectively be limited to 3% (since that’s the lowest, and some networks require uniform charges across all cards).
But it’s important to understand that breaking the card network rules isn’t technically “illegal” and you’re not breaking any laws. Instead, penalties can come in the form of fines from the networks or they could (in extreme scenarios) revoke your right to accept their cards.
Surcharge Disclosure Requirements for Oregon Merchants
Since Oregon doesn’t impose state-specific disclosure rules, businesses can default to federal standards and card network requirements.
Required Disclosures:
- Customers must be informed about the surcharge policy prior to the transaction.
- Clear signage with surcharge amounts should be displayed at the point of entry and point of sale (for in-person transactions).
- Ecommerce businesses must clearly display surcharge policies on the checkout page.
- Verbal notification must be given for phone transactions.
- Surcharges must appear as separate line items on all receipts.
If your business is imposing a surcharge program, it’s very important that your staff is trained to clearly explain your surcharge policies. It’s all about transparency, and you can’t attempt to deceive your customers with hidden fees. If those customers have questions, your staff should know how to answer them.
Read More: 11 Reasons Why Businesses Should NOT Surcharge Credit Cards
Surcharging Rules for Oregon Government Entities
The only Oregon laws addressing surcharging are in place to provide clear authority for public entities to impose surcharge fees on credit card transactions.
Under ORS 825.502, the Oregon Department of Transportation may accept payment of taxes and fees by credit card, with the ability to add a surcharge to offset fees associated with acceptance costs.
ORS 802.112 also says that any general government authority can impose a surcharge fee if a transaction can be processed in multiple ways and the customer chooses the more expensive option (which is always going to be a credit card).
Both of these laws demonstrate that the purpose of surcharging in Oregon is for cost-recovery and not to generate profits.
Read More: 9 Scenarios When Credit Card Surcharging Makes Sense
Gas Station Dual Pricing in Oregon
It’s common for gas stations in Oregon to use a dual pricing model. However, this isn’t a requirement by law and it’s not a credit card surcharge.
Since this is often a point of confusion for people, I just want to quickly clarify the differences.
With dual pricing, the business lists two prices for every item—cash price and credit card price. The cash price is typically less than the credit card price because it’s cheaper for the merchant to accept those transactions (there aren’t any processing fees on cash).
Using the cash discount or dual pricing model, customers get a break for paying with cash.
Surcharging is different. Surcharge fees are added to the base cost of a product or service when customers use a credit card to pay.
In both scenarios, the customer pays more for using a credit card. But there’s a subtle nuance to how that higher price is imposed. Both are legal in Oregon, but dual pricing and cash discounts are typically seen at gas stations.
Read More: Surcharge vs. Cash Discount
Common Surcharging Mistakes to Avoid
While surcharging is legal in Oregon and fairly relaxed compared to the surcharge laws in other states, it’s definitely not the wild west. We still see businesses making mistakes that can get them in trouble.
- Forgetting to notify processors: Most processor agreements require at least 30 days’ notice before surcharge programs can be activated.
- Forgetting to notify card networks: Visa, Mastercard, Amex, and Discover all require written notification before you begin surcharging their cards.
- Surcharging debit cards: This is illegal in all 50 states and governed by federal law.
- Profiting on surcharge fees: Surcharges are just meant for cost recovery and can’t exceed your actual processing costs.
- Failing to properly disclose surcharges: Your surcharge program must be clear and conspicuous to customers, and you can’t surprise them with extra charges.
Businesses in certain industries should take additional steps to ensure surcharges are transparent. For example, restaurants should post surcharge notices on menus and pricing boards.
Read More: Pros and Cons of Surcharging
How to Report Illegal Surcharging in Oregon
If you’re a consumer in Oregon and suspect a business is illegally surcharging transactions, you can file a complaint with the state’s Department of Justice Consumer Protection Division.
Here are your options:
- Submit a complaint online using this form.
- Email help@oregonconsumer.gov
- Call 1-877-877-9392
Please drop a comment below if you’ve experienced surcharges in Oregon. We don’t offer any consumer services here at MCC, but we’ll pass your feelings along to our clients operating in your state.
Final Thoughts: Should Oregon Businesses Add a Surcharge Fee to Credit Card Transactions?
Oregon is one of the easiest states to implement a surcharge program because you’re not dealing with any state-specific red tape.
That said, this isn’t necessarily a no-brainer decision for Oregon businesses.
Passing merchant fees to your customers can backfire, and you may ultimately end up losing them altogether. If you have customers spending hundreds or thousands of dollars at your business throughout the year, are you willing to lose them to recoup an extra $10 or $20? It’s probably not worth it.
Instead, you can look for other ways to offset your processing costs.
Negotiating a lower rate and removing bogus fees from your account is the first place to start. This can save you thousands of dollars on processing and you won’t have to burden your customers.
Contact our team here at MCC for a free audit and analysis. We’ll let you know how much you can save without switching providers, and you won’t have to surcharge anyone either.