Maryland credit card surcharge law permits merchants to add a fee for credit card payments; the state has no statute banning the practice. What Maryland does have is a strong consumer protection statute, and the card networks impose their own compliance rules on top. Get the disclosure wrong, exceed the cap, or surcharge the wrong card type and you can face civil penalties up to $10,000 per violation plus the loss of your ability to process cards.
Is Surcharging Legal in Maryland
Yes. About a dozen states and territories prohibit credit card surcharges outright, including Connecticut, Kansas, Maine, Massachusetts, and Oklahoma.1National Conference of State Legislatures. Credit or Debit Card Surcharges Statutes Maryland is not one of them. No Maryland statute specifically addresses whether merchants can add a surcharge to credit card transactions.
The general legal framework instead comes from the Maryland Consumer Protection Act, which defines a broad list of unfair, abusive, or deceptive trade practices, including any misleading statement or representation that tends to deceive consumers.2Maryland General Assembly. Maryland Code Commercial Law 13-301 – Unfair, Abusive, or Deceptive Trade Practices Defined A surcharge that is hidden, poorly disclosed, or materially larger than the merchant’s actual processing costs can fall under that umbrella. Surcharging is legal in Maryland, but transparency is the price of admission.
Card Network Rules You Have To Follow
Even where state law is silent, Visa and Mastercard impose requirements that function like a second layer of regulation. Ignore them and your merchant account can be terminated regardless of what Maryland allows.
Both networks require written advance notice before you begin surcharging. Visa requires merchants to notify both Visa and their acquiring bank at least 30 days before implementing a surcharge.3Visa. Surcharging Credit Cards – Q&A for Merchants Mastercard has the same 30-day requirement for notifying both Mastercard and the acquirer.4Mastercard. Mastercard Frequently Asked Questions – Merchant Surcharge
Beyond notice, both networks require clear disclosure at the point of sale. Customers must be informed of the surcharge before they complete the transaction, and the surcharge must appear as a separate line item on the receipt. In a physical store, that means posted signage at the entrance or register. For e-commerce, the surcharge must be visible on the checkout page before the customer submits payment.
How Much You Can Charge
The cap is not open-ended. Visa limits surcharges to the lower of 3% or your actual merchant discount rate for that card type, a ceiling Visa lowered from 4% to 3% effective April 15, 2023. Mastercard still allows surcharges up to 4%, but you can never surcharge more than your actual cost of acceptance for that transaction.
In practice, most merchants pay processing fees between 1.5% and 3.5%, so the real ceiling for most businesses is whatever they actually pay their processor. A merchant paying 2.1% in fees who adds a 3% surcharge is violating Visa’s rules outright, and the spread could also look like a deceptive markup under the Maryland CPA.
Debit and Prepaid Cards Cannot Be Surcharged
This is where merchants most often trip up. Surcharging applies only to credit card purchases. Debit and prepaid cards are off-limits, even when the customer selects “credit” at the terminal.3Visa. Surcharging Credit Cards – Q&A for Merchants Your point-of-sale system needs to distinguish between card types and exempt debit and prepaid transactions automatically. If it cannot do that reliably, you are gambling on compliance every time a customer pays.
Penalties for Getting It Wrong
When a surcharge practice crosses into deceptive territory, the consequences come from the Consumer Protection Act. A business that violates the CPA faces civil fines of up to $10,000 per violation. If you have already been found in violation and repeat the same practice, the fine rises to $25,000 per subsequent violation.5Maryland General Assembly. Maryland Code Commercial Law 13-410
Those fines are civil penalties recoverable by the State through either a civil lawsuit or an administrative cease-and-desist proceeding. The Consumer Protection Division weighs the seriousness of the violation, whether the merchant acted in good faith, any history of prior violations, and whether a cease-and-desist order alone would protect consumers.5Maryland General Assembly. Maryland Code Commercial Law 13-410
State penalties are only part of the exposure. Visa and Mastercard can impose their own consequences on merchants who violate surcharging rules, including network fines, higher processing fees, or suspension of the merchant’s ability to accept that card brand. Losing Visa or Mastercard acceptance is an existential problem for most retail businesses, and the networks enforce their rules independently of anything the state does.
Consumer Lawsuits
State enforcement is not the only risk. Individual consumers can sue merchants directly under the CPA’s private right of action. Any person who suffers injury or loss from a prohibited practice can bring a lawsuit for damages, and a prevailing consumer can recover reasonable attorney’s fees.6New York Codes, Rules and Regulations. Maryland Code Commercial Law 13-408 – Action for Damages The fee-shifting provision matters because it makes small-dollar claims financially viable to pursue.
A single customer overcharged by a few dollars is not the real exposure. The risk is that a pattern of improper surcharges invites a suit representing many customers, each with an independent claim. Combined with attorney’s fees and possible state enforcement running in parallel, sloppy surcharge practices create compounding liability.
Cash Discount as an Alternative
Many Maryland merchants avoid surcharge compliance entirely by offering a cash discount instead. Federal law explicitly protects this approach. The Durbin Amendment prohibits card networks from penalizing merchants who offer discounts for payment by cash, check, or debit card, provided the discount is available to all customers and clearly disclosed.7Office of the Law Revision Counsel. 15 USC 1693o-2 – Reasonable Fees and Rules for Payment Card Transactions
The legal distinction matters. A discount is a reduction from the posted price. A surcharge is an addition to it. Under federal law, a discount cannot be reframed as an increase to the price customers are told is the regular price.7Office of the Law Revision Counsel. 15 USC 1693o-2 – Reasonable Fees and Rules for Payment Card Transactions If your shelf price is $100, you can offer cash customers a price of $97. You cannot set your shelf price at $97 and then add $3 at the register for credit card users while calling it a discount.
For merchants who want to offset processing costs without the network notification process, the surcharge cap math, and the debit-card exclusion problem, a straightforward cash discount program is the simpler path. Clear signage showing the regular price and the discounted cash price is still required.
Compliance Checklist
If you decide to surcharge credit card transactions in Maryland, the steps are specific and sequential:
- Send written notice to both Visa and Mastercard and to your acquiring bank at least 30 days before you start surcharging.
- Post clear signage at the store entrance or register showing the surcharge amount and stating that it applies only to credit cards.
- For online sales, show the surcharge on the checkout page before the customer submits payment.
- Print the surcharge on the receipt as a separate line item, not buried in the total.
- Configure your POS system to identify card types and automatically exempt debit and prepaid transactions.
- Stay within the cap: never exceed 3% for Visa or 4% for Mastercard, and never exceed your actual processing cost for that card type.
- Keep records of your processing costs so you can demonstrate the surcharge reflects actual fees if a regulator or customer challenges it.
Missing any one of these steps creates exposure under both the card network agreements and the Maryland Consumer Protection Act. The businesses that run into trouble rarely set out to deceive anyone. They skip the notification, forget to update the POS system, or let the surcharge drift above their actual costs. Compliance is an ongoing obligation, not a one-time setup.