Whether you’re a merchant or consumer in Wisconsin, you’ve probably noticed more businesses passing credit card processing costs to their customers through surcharge fees.
Is this legal? Are you being ripped off? Can you add surcharge fees at your own business?
Wisconsin actually has some of the most straightforward surcharge laws in the country:
- Credit card surcharging is legal in Wisconsin.
- There are no state-specific laws that prohibit or restrict surcharges.
- Wisconsin follows federal guidelines, allowing surcharges up to 4%.
- Debit card surcharging is illegal (as it is nationwide).
- Merchants must still comply with card network rules to avoid penalties.
Beyond these basics, there’s more information worth understanding, especially if you’re considering implementing a surcharge program at your Wisconsin business.
Disclaimer: This information is provided for reference purposes only and does not constitute legal advice. For specific legal guidance, consult with an attorney.
Can Businesses in Wisconsin Legally Add Surcharge Fees to Credit Card Transactions?
Yes, it’s legal for merchants to impose surcharge fees on credit cards without any state-level restrictions.
Unlike states like Colorado (which caps surcharges at 2%) or Connecticut (where surcharging is outright banned), Wisconsin takes a hands-off approach. There aren’t any state laws governing if and how surcharges can be implemented statewide.
This means that merchants in Wisconsin can default to federal regulations and card network rules without worrying about state-imposed limitations.
But just because surcharging is legal doesn’t mean it’s simple. Wisconsin merchants still need to follow federal laws and comply with the rules set by Visa, Mastercard, American Express, and Discover.
Federal Law Sets the Foundation
Under federal law, businesses can surcharge up to 4% of the transaction amount if the customer pays with a credit card. This is the absolute maximum allowable surcharge fee, and you cannot exceed this threshold (even if your actual processing costs are higher).
But here’s the catch.
While federal law allows up to 4%, the major card networks have their own caps. Visa and Mastercard both limit surcharges to 3% per transaction. So in practice, your surcharges can’t exceed 3% (even though you can “legally” surcharge up to 4%).
Card Brand Rules Still Apply
Beyond the capped surcharge percentages, the card networks also have specific requirements for how surcharges must be disclosed and applied.
Here’s what you need to know:
- 30-Day Advance Notice: You must notify Visa, Mastercard, Amex, and Discover at least 30 days before you start surcharging.
- Uniform Application: Surcharge fees must be applied equally across all card types and brands.
- Clear Disclosure: Customers must be informed about the surcharge prior to completing the purchase (for all in-person, online, and phone sales).
- Receipt Requirements: Surcharge amounts must appear as a separate line item on customer receipts.
- No Debit Card Surcharges: Debit cards can’t be surcharged, even if they’re run as a credit.
While you technically won’t be breaking any laws (legally speaking), violating these rules can result in fines from the card networks.
And these aren’t just empty threats. According to the Wisconsin Restaurant Association, a local restaurant in Wisconsin was fined $25,000 by Visa for surcharging non-compliance.
So don’t think it can’t happen to you. That’s a lot of money to pay in penalties for something that could easily have been avoided.
How Wisconsin Merchants Can Stay Compliant When Surcharging
If you decide to implement a surcharge program at your Wisconsin business, make sure to keep the following compliance tips in mind:
- Notify the card networks at least 30 days before you start surcharging.
- Each network has its own notification process, so check each one for specific instructions.
- Update your POS system to properly calculate, display, and apply surcharges.
- Make sure you aren’t adding surcharge fees to debit card transactions.
- Post clear signage at your store’s entrance, at the point of sale, and on your website.
- Train your staff to understand your surcharge policy so they can clearly explain it to customers who have questions.
I also recommend that you review the FTC’s latest junk fee ruling to ensure you’re properly following federal guidelines.
Wisconsin’s Legislative History on Surcharging (and Why it Matters)
Wisconsin’s current relaxed stance on surcharging wasn’t always the case.
Back in 2013, Senate Bill 213 was introduced by Wisconsin lawmakers. Under the proposed law, businesses would have legally been allowed to offer cash discounts but would have been prohibited from adding surcharge fees to credit card purchases.
And while the bill didn’t ultimately pass, it’s important to keep in mind how quickly things can change.
In recent years, we’ve seen other states change how they regulate surcharge laws. California and New York both changed their surcharge laws in 2014, and other states like North Carolina have new bills making their way through the legislative process aiming to restrict surcharging.
So while surcharging remains legal in Wisconsin today, that may not be the case forever.
Merchants need to keep this in mind prior to implementing surcharge programs. If you’re relying on that extra 3% to cover your processing costs, it could be a big problem for your business if surcharging gets banned down the road.
There’s a good chance your processor will raise your rates over time. And if your customers are footing the bill, you’re far less likely to care. But if that ability goes away or has stricter regulations, it will be a rude awakening for your financial situation.
Read More: Surcharge Laws by State
What Consumers in Wisconsin Should Know to Protect Themselves
If you’re a consumer in Wisconsin, here’s what you need to know about surcharge fees you might encounter at businesses throughout the state.
- Surcharges are legal, but businesses must disclose the fee before you complete the purchase.
- Look for a posted surcharge policy at the store’s entrance or point of sale.
- Businesses can’t legally surcharge you more than 4% (even though most credit card networks cap the fees at 3%).
- Debit cards can’t be surcharged anywhere in Wisconsin (or throughout the US for that matter).
So if you pay a surcharge fee that exceeds 4% or if you weren’t notified about the surcharge prior to paying, it’s a sign the business isn’t following the law. Same goes if you get hit with a surcharge fee when you pay with a debit card.
Filing Complaints
If you think that you’ve been illegally surcharged in the state of Wisconsin, your best option is to file a complaint directly with the DATCP (Department of Agriculture, Trade and Consumer Protection).
This is Wisconsin’s primary resource for consumer protections.
Just be aware that the state likely won’t be able to compensate you for anything. All they’d do is potentially go after the business and notify them about what they’re doing wrong.
So if you want to be refunded for your surcharge fee, you’ll need to ask the business directly.
And while we don’t offer any consumer services here at MCC, you can still let us know about your experience with surcharges in the comments section.
Final Thoughts
Wisconsin’s approach to surcharges is definitely one of the easiest for merchants to navigate. With no state-level restrictions behind federal law, businesses have the flexibility to offset their processing costs if they choose to do so.
That said, just because you can surcharge it doesn’t mean that you should.
Customers hate being nickel-and-dimed by extra fees. And many of them will take their business elsewhere if you’re charging them for something that they view as an ordinary operating expense.
Plus, one small mis-step can still lead to major penalties from the card networks. I’m sure the Wisconsin restaurant that was fined $25,000 would have rather just paid the extra few dollars per transaction.
If you want to save money on credit card processing without burdening your customers, we can help. Our team here at Merchant Cost Consulting specializes in auditing merchant statements and negotiating with processors on your behalf. We help businesses lower their processing costs without switching providers or implementing surcharge programs. Find out how much you can save today.