Surcharge Rules and State Laws

In some cases you are allowed to pass fees on to your customers; however, we believe the rules can be cumbersome and managing the surcharges for your child care business may be challenging. At least 10 states have surcharge restrictions including: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Get information on surcharge rules:

Summary of Credit Card Surcharge Rules

In short, this is what a merchant must do in order to impose surcharges:

  1. Notify the card companies and Tuition Express 30 days in advance of beginning to surcharge.
  2. Limit surcharging to credit cards only (no surcharging of debit or prepaid cards).
  3. Limit the amount to your merchant discount rate for the applicable credit card (in other words you cannot charge more than you were charged by the credit card company for that particular card).
  4. Disclose the surcharge as a merchant fee and clearly alert consumers to the practice at the point of sale and on every receipt.

Our Recommendation

We suggest the best way to pass processing fees on to your customers is to build those fees right into your tuition and fee structure for all customers. For example, if a credit card transaction costs you, on average, 2% and half your families pay by credit card, then raising rates across-the-board by just 1% would cover your costs without requiring you to jump through the legal hoops associated with charging a separate credit card surcharge. So, the next time you have a tuition and/or fee adjustment, simply plan for the fees associated with processing credit card and ACH transactions with Tuition Express.

If you decide to add a separate fee, see: How to Add a Card Processing Fee.

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