What Is a Credit Card Surcharge?
A credit card surcharge is an additional fee added to a transaction when a customer pays with a credit card. The purpose is to offset the processing costs a business incurs when accepting credit cards — costs that typically include a percentage of the transaction value charged by the payment processor.
Surcharges apply only to credit card payments. They may never be applied to debit card, prepaid card, cash, or check transactions — even when a debit card is run as credit at checkout.
Surcharges vs. Convenience Fees vs. Cash Discounting
These three terms are often confused. Understanding the difference matters for both compliance and how you communicate with clients.
Surcharge — An additional fee added specifically when a customer pays by credit card, intended to recover the cost of processing that card. It is expressed as a percentage of the transaction and must be disclosed before payment. It cannot be applied alongside a convenience fee on the same transaction.
Convenience fee — A fee charged when a customer pays through a non-standard channel (such as online or over the phone instead of in person). Unlike a surcharge, it can apply regardless of payment method and is typically a flat dollar amount. Visa and Mastercard do not allow a surcharge and a convenience fee to be applied to the same transaction.
Cash discounting — The inverse model: card processing costs are built into the posted price, and customers who pay with cash receive a discount off that price. To be compliant, businesses must clearly display both a cash price and a card price. Simply labeling a card fee as a "cash discount" without actually reducing the price for cash payers is treated as a surcharge under card network rules.
Aesthetic Record supports both surcharging and convenience fees. A practice may choose one or the other, but not both on the same transaction.
Where Surcharging Is Permitted
Surcharging rules vary by state. Practices are responsible for confirming that surcharging is permitted where they operate.
States where surcharging is generally allowed (most with a cap and disclosure requirements):
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Washington D.C., Florida, Georgia, Hawaii, Idaho, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming
States and territories where surcharging is currently prohibited:
Connecticut, Maine, Massachusetts, Puerto Rico
Requirements vary even among permitted states. For example, Colorado caps surcharges at 2% or the actual cost of processing, whichever the merchant chooses.
Because laws can change through legislation or litigation, practices should confirm current rules with their state attorney general or a payments attorney before enabling surcharging.
Card Network Rules
In addition to state law, Visa and Mastercard set their own requirements:
Surcharges may only be applied to credit card transactions — never to debit or prepaid cards.
Visa caps credit card surcharges at 3%. Mastercard's cap is 4%.
The surcharge must be disclosed to the customer before the transaction is completed.
The surcharge must appear as a separate line item on the receipt — it cannot be folded into the base price.
When a transaction is refunded, the surcharge must be returned along with the rest of the purchase amount.
Things to Consider Before Enabling Surcharging
Before enabling surcharging, practices should weigh the following:
Legal compliance. Confirm surcharging is permitted in your state and that your rate does not exceed state or card network caps.
Client transparency. Clients must be notified of any surcharge before their transaction is completed. This includes signage at the point of service, disclosure on digital invoices or checkout screens, and verbal notification when applicable.
Impact on client experience. Some clients may respond negatively to a surcharge or seek providers who absorb card costs. Consider whether the financial benefit outweighs any potential effect on satisfaction and retention.
Debit vs. credit card mix. Surcharges apply only to credit cards. If a significant portion of your clients pay with debit cards, the impact on your overall processing cost recovery will be proportionally lower.
Alternatives. Aesthetic Record also supports a convenience fee structure. If a flat fee model is a better fit for your practice, that may be the more suitable option.
How to Enable Surcharging in Aesthetic Record
Before using the surcharge feature, please ensure that you read and understand the surcharge rules and regulations.
Clearent Users:
Please navigate to Settings → Manage Clinics → Setup Surcharge. The surcharge will show a Pending status.
Then, please email processing@aestheticrecord.com. Our team will email you the form to complete Surcharge Program registration. Please fill out and return.
Once approved by your processor, Aesthetic Record will activate surcharging in your account. Your surcharge will be capped at your actual processing rate—it will never exceed the fee charged to your practice on a given transaction.
Stripe Users:
Please navigate to Settings → Manage Clinics → Setup Surcharge and save.
Responsibilities: Practice vs. Aesthetic Record
The practice is responsible for:
Verifying that surcharging is legal in the state(s) where they operate
Complying with Visa and Mastercard surcharge requirements
Notifying clients of the surcharge before transactions are completed
Displaying required disclosures at the point of service and in digital communications
Ensuring their surcharge rate does not violate state caps
Aesthetic Record is responsible for:
Providing surcharging functionality through Clearent and Stripe
Enabling surcharging in the practice's account once the registration form is approved
Ensuring the surcharge applied to any transaction does not exceed the processing fee charged to the practice
Generating itemized invoices that display the surcharge as a separate line item
Best Practices
Be transparent with clients. Disclose the surcharge at every touchpoint where pricing is visible — the front desk, your booking or checkout flow, and your receipts. Clients should never be surprised by the fee.
If you are a Clearent user, you can order your required surcharge signage using the form below:
Set a rate that covers costs, not one that generates profit. Card network rules require that surcharges be used to offset processing costs — they are not a revenue source. Aesthetic Record enforces this by capping the surcharge at your actual processing rate.
Offer alternatives. Providing clients with payment options that don't carry a surcharge — such as cash, check, or debit card — is both a compliance best practice and a good client experience.
Train your team. Staff should be able to explain what the surcharge is, why it exists, and how it's calculated. Clients who understand the fee are less likely to be frustrated by it.
Review periodically. Processing rates can change, and state laws evolve. Revisit your surcharge setup at least annually to ensure continued compliance.
Refund the surcharge on refunded transactions. If a transaction is refunded, the surcharge must be returned to the client along with the base transaction amount.
Pros and Cons of Surcharging
Benefits:
Recovers credit card processing costs that would otherwise reduce your margin
Reduces the need to raise prices across the board to offset card fees
Can encourage clients to pay with lower-cost methods like cash or debit card
Drawbacks:
Some clients may react negatively and view the fee as a penalty for using their preferred payment method
May create complexity at checkout if not communicated clearly
Requires ongoing compliance monitoring as state laws and card network rules can change
Violations can result in state fines, card network penalties, consumer lawsuits, or termination of your merchant account
Frequently Asked Questions
Can I surcharge debit card transactions? No. Surcharging applies only to credit card purchases. You may never add a surcharge to a debit card, prepaid card, cash, or check payment — even when a debit card is processed as credit. This is handled by AR when you use our POS to transmit payments.
Can I apply both a surcharge and a convenience fee? No. Visa and Mastercard prohibit applying both on the same transaction. Choose one approach for your practice.
Does the surcharge apply to online or in-app payments? Yes. Surcharges can apply to credit card transactions regardless of whether payment is made in person, online, or through the app — as long as the surcharge is disclosed before the client completes payment.
What if a client is refunded — do I refund the surcharge too? Yes. The surcharge must be returned to the client along with the full purchase amount on any refunded transaction.
Will AR cap my surcharge amount? Yes. Aesthetic Record restricts surcharge amounts so they never exceed the processing fee charged to the practice on that transaction.
What are the consequences of non-compliance? Violations of surcharge rules can lead to state-level fines, penalties from Visa or Mastercard, consumer lawsuits, and in serious cases, termination of your merchant account. Practices are responsible for ensuring they meet all applicable requirements.