Legal But Controversial: Arizona’s Credit Card Surcharges Explained

The cost of everything is still going up. You're not just paying more for goods and services; it's now costing you more to use your own money.

Have you noticed the hidden charges being added to your transactions lately? Increasingly, retailers are no longer absorbing credit card processing fees as a cost of doing business and instead passing the cost of "convenience" onto customers.

What Arizona Law Says About Credit Card Fees

If you've been hit with a “convenience fee” just for using your credit card and wondered, “Wait, is that even legal?” Unfortunately, the short answer is: yes. According to the website Merchant Cost Consulting, in Arizona, it's legal to add a credit card surcharge to transactions, but there are some important rules to follow.

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Arizona doesn’t have any state laws banning credit card surcharges, so businesses here can legally pass on processing fees to customers.

There are federal guidelines, as well as rules imposed by the card networks. For example, Visa and Mastercard cap surcharges at 3%, even though federal law allows up to 4%.

READ MORE: If You Can't Afford to Pay, Can a Funeral Home Hold a Loved One's Remains in Arizona?

Debit Card Rules: What You’re Protected From

The good news is, merchants aren't allowed to charge a fee for processing debit cards. Vendors can’t add a surcharge to those, even if they’re run as credit.

How Retailers Must Inform Customers

Rather than raising the cost of goods and services, many merchants are choosing to make this fee a separate line item so customers know the business is not raising costs again.

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Why Some Businesses Offer Cash Discounts Instead

Keeping the customer informed of the processing fees is an essential and mandatory part of the process. That way, consumers can choose another, less costly method of payment.

Merchants must clearly post signs at the entrance and point of sale, and the surcharge has to show up as a separate line item on your receipt.

Before a merchant is allowed to pass the fees along to the customer, they're required to notify their credit card processing networks at least thirty days in advance. Online stores that charge a fee must inform customers of the charge on their website.

READ THIS: Credit card fees aren't the only things going up. Now the Post Office is charging more, too!

Tips for Avoiding Extra Charges at Checkout

Which is why some businesses prefer to offer a "cash discount" rather than charging a fee for credit card processing. Yes, it's the same concept, it just makes customers feel like they're saving money rather than being stung with an extra charge.