Many automotive dealerships are exploring or have already implemented the option of surcharging credit card transactions to offset processing fees. However, it’s crucial to recognize that not all credit card processing companies are providing adequate guidance to ensure that these surcharges are implemented legally and in compliance with state & federal laws, and credit card network regulations. Understanding and adhering to the correct procedures is vital to avoid fines, legal issues, and to maintain customer trust. Below is an essential guide for auto dealerships to surcharge for credit card charges in a manner that is both legal and compliant, however SwipedUnlimited™ will work with your dealership to ensure compliance with your local area.

1. Understand State Laws: First, determine if your state allows surcharging. Some states have laws that prohibit or restrict surcharging. Ensure that you are compliant with local regulations before implementing any surcharge program.
2. Follow Card Network Guidelines: Visa, MasterCard, Discover, and American Express have specific guidelines for merchants who wish to apply a surcharge to credit card transactions. Generally, these guidelines require notifying the card networks and your acquirer at least 30 days before beginning to surcharge. Check the requirements of each network, as they can vary.
3. Transparent Communication: You must clearly inform your customers that a surcharge will be applied to credit card transactions. This information should be visible at the point of entry, at the point of sale, and on the receipt. The surcharge amount or percentage should be clearly stated.
4. Surcharge Limits: The surcharge cannot exceed the cost of acceptance for credit card transactions, typically capped at 4%, but 3% for Visa. Ensure that the surcharge amount is compliant with the appropriate limit.
5. Differentiate Between Credit and Debit: Surcharges can only be applied to credit card transactions. You cannot surcharge debit card or prepaid card transactions. Ensure your payment systems can distinguish between card types to apply surcharges correctly.
6. Documentation and Compliance: Keep records of your notification to the card networks and your acquirer and maintain compliance with all network rules and state laws. SwipedUnlimited regularly reviews your surcharging practices to ensure ongoing compliance.
7. Education and Training: SwipedUnlimited™ will continually educate your staff about the surcharge policy and train them on how to communicate this to customers. We will train your staff to be prepared to answer any questions customers might have.

By following these steps, an auto dealership can legally and compliantly implement a surcharge for credit card charges, helping to offset the costs associated with card acceptance while maintaining transparency and customer trust.