Credit Transaction Charge Limitations

Under current law, a seller, lessor, or company issuing a credit or charge card is prohibited from imposing a surcharge against a person who elects to pay for a sales or lease transaction by using a credit or charge card. The act:

• Repeals the prohibition; and
• Limits the maximum surcharge amount per transaction to 2% of the total cost to the buyer or lessee for the sales or lease transaction or the merchant discount fee, which is defined as the actual fee that a seller or lessor (merchant) pays its processor or service provider to process the transaction.

A merchant is required to display notice regarding the surcharge on the merchant's premises or, for online purchases, before an online customer's completion of the sales or lease transaction.

The act clarifies that a merchant is prohibited from applying the surcharge to cash or check payments, debit card payments, or payments made by redemption of a gift card.

If a merchant imposes a surcharge in violation of the act, the merchant is subject to liability as a creditor under the "Uniform Consumer Credit Code".

(Note: This summary applies to this bill as enacted.)