Credit card surcharges in 2027: what a restaurant may add in each state, and your real card rate

Picture a card statement quoted at 2.35% plus 10 cents that charges $2,281 on $60,000 of sales: an effective rate of 3.8%. Before you add a surcharge to recover that gap, know what your state's law allows in 2027.

In most states a restaurant may add a credit card surcharge in 2027. Under Visa's rules (February 2024 version) that means credit cards only, never debit, no more than your cost or 3%, with 30 days' notice to your processor and signs at the door and the register. Connecticut, Maine and Massachusetts ban it by statute. Colorado, Kansas, Minnesota, New Jersey, New York and Oklahoma allow it with conditions; Kansas and Oklahoma changed their laws in 2025, so lists calling them bans are out of date. Last checked: 5 November 2026.

What is your real card rate? Work it out before anything else

Your effective rate is total card fees divided by total card sales, from the same month's statement. It is almost always higher than the rate you were quoted, because the quote leaves out per-transaction pennies, card-type upcharges and monthly fees. Until you know it, you cannot price a surcharge, a cash discount or a menu rise.

An illustration at a quoted rate of 2.35% plus 10 cents, for a month with $60,000 of card sales in 1,500 transactions ($40 average):

The figures below the first two lines are illustrative; your statement names its own. The worksheet:

EFFECTIVE RATE WORKSHEET (one month, one location)

A. Total card sales (credit + debit)                $________
B. Number of card transactions                      ________
C. Every fee on the statement, added up             $________
   (percentage fees, per-item fees, monthly fees, PCI, rentals,
    chargebacks, "non-qualified" or "mid-qualified" upcharges)
D. Effective rate = C / A x 100                      ______%
E. Average ticket = A / B                            $________
F. Credit share of sales (ask your processor)        ______%
G. Your rate on the Visa credit cards you would
   surcharge (all Visa credit, or one card product)  ______%

Surcharge ceiling under Visa's rules = the lower of G and 3%.
(Mastercard: your average effective Mastercard credit rate, max 4%.)

Debit is the cheap part of the mix. Our reading of the Federal Reserve's Regulation II data (updated 19 December 2025) is that the average debit interchange fee in 2024 was $0.23, or 0.47% of the transaction, on cards from large banks, and $0.51, or 1.21%, on cards from smaller banks. Visa's rules do not allow debit to be surcharged anyway, so the fee pain sits in credit.

Which states ban or limit credit card surcharges?

We read each statute below on 5 November 2026. Where we could not open the official text, we say so instead of repeating a vendor's list.

Visa's own surcharging Q&A (version of 15 February 2024, still the live version) lists Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico as prohibiting surcharges and says its list may contain errors. Oklahoma's change came later. In California, Florida and Texas, a ban is printed in the statute book but courts have struck it down or limited it; treat those three as unsettled and ask counsel.

How many restaurants are affected? Our analysis of the BLS Quarterly Census of Employment and Wages for the first quarter of 2026 (NAICS 722511, private full-service restaurants, state totals, accessed 5 November 2026), sorted by the statutes above:

More than one in four full-service restaurants sits in a state where the statute book and the courts disagree. That is the group most exposed to an answer copied from an old list.

What do Visa and Mastercard require?

The card networks' rules apply on top of state law. Visa's surcharging Q&A sets five conditions for US merchants:

1. Notify your acquirer (your processor) at least 30 days before you start.
2. Credit cards only. Debit and prepaid cards cannot be surcharged, even when the guest presses "credit" on a debit card.
3. Cap: the lower of your merchant discount rate for that card and 3%.
4. Disclose at the point of entry and at the point of sale, online and in person, and show the surcharge as a separate line on every receipt.
5. Treat brands alike: you typically must surcharge Visa on the same terms as any equal or higher-cost brand you surcharge.

Visa says the acquirer of a merchant that surcharges improperly may face an immediate $1,000 fine. Read your processing agreement for whether that comes back to you.

Mastercard publishes its own rule. Its merchant surcharge page (which blocks automated requests; we read the archive.org copy of 19 June 2025) caps a brand-level surcharge at the lesser of your average effective Mastercard merchant discount rate and a "Maximum Surcharge Cap" of 4%. It wants notice to both Mastercard, through its online form, and your acquirer at least 30 days before you start. In practice Visa's 3% is the lower ceiling for a restaurant that takes both. American Express and Discover have their own merchant terms; read yours before adding their cards.

Surcharge, cash discount or menu price: which should you choose?

All three recover the same fees. They differ in what the guest sees and which rules apply.

Worked through with the month above: card fees of $2,281, total sales of $70,000 including $10,000 in cash, and credit at 75% of card sales ($45,000).

• 3% credit surcharge: recovers $1,350 if no guest switches to debit or cash, 59% of the fees. Debit fees stay with you.
• Menu rise of 3.3%: recovers about $2,310 across all $70,000, cash included, with no sign, no notice and no surcharge line.
• Cash discount: price the menu at the card price and give cash payers a stated discount. Same revenue as the menu rise from card payers, less from cash.

The decision rule:

1. In CT, ME or MA?             -> no surcharge. Menu price or cash discount.
2. In CA, FL or TX?             -> unsettled law; ask counsel first.
3. Effective rate under 3%?     -> a surcharge recovers little; raise prices.
4. Mostly debit or cash guests? -> a surcharge misses most fees; raise prices.
5. Still want a surcharge?      -> 30 days' notice, signs, receipt line,
                                   credit only, at or under your cost and 3%
                                   (2% in OK, 2% or your cost in CO),
                                   plus your state's notice rule.

The menu route is simpler than it sounds: 3.5% on a $40 meal is $1.40, built into the prices guests already see, with no sign, no receipt line and no processor notice. Our menu price calculator works out the rounded menu prices, and the guide to raising menu prices in 2027 covers which items to move. A surcharge is not a service charge: how any other fee must be shown is in the guide to service fees and junk-fee laws, and how a service charge is paid to staff is in our service charge guide. Get advice before you surcharge in California, Florida or Texas, if you take only cards, or if you run venues in more than one state.

Does the Visa and Mastercard settlement change surcharging?

Not yet. The federal court in Brooklyn granted preliminary approval to a revised settlement of the merchant class action (In re Payment Card Interchange Fee, MDL 1720) on 9 June 2026, Payments Dive reported. It would give merchants new rights to surcharge and discount certain cards and to decline some premium and commercial credit cards. Final approval follows a notice and comment period, and the National Association of Convenience Stores has said it will appeal if approval is granted. We found no final approval when we checked on 5 November 2026. Until the rules change, follow the current network rules above.

Surcharge sign wording you can copy

For the door or host stand (point of entry):

We add a surcharge of [3]% to credit card payments.
This is not greater than our cost of accepting credit cards.
There is no surcharge on debit cards, cash or gift cards.

For the register, the menu and the online ordering page (point of sale):

Credit card payments include a [3]% surcharge.
Debit, cash and gift card payments do not.

On the receipt:

Subtotal                 $40.00
Sales tax                 $x.xx
Credit card surcharge    $1.20
Total                    $xx.xx

State adjustments: in New Jersey, put the amount on the menu, including online and QR menus; in Minnesota, tell the guest out loud as well; in New York, post the card price including the surcharge, or both prices side by side; in Oklahoma, post the amount at the door and register and on your website's home page and checkout, and say it aloud on phone orders. In Colorado, the 2% option requires this exact sign or online notice, from C.R.S. 5-2-212 (the option capped at your actual merchant discount fee has its own wording in the same section):

To cover the cost of processing a credit or charge card transaction,
and pursuant to section 5-2-212, Colorado Revised Statutes, a seller
or lessor may impose a processing surcharge in an amount not to exceed
2% of the total payment made for goods or services purchased or leased
by use of a credit or charge card. A seller or lessor shall not impose
a processing surcharge on payments made by use of cash, a check, or a
debit card or redemption of a gift card.

Whether the surcharge itself carries sales tax depends on your state's definition of the sales price; see our restaurant sales tax guide.

Changelog

• 5 November 2026: state statutes re-read as listed. Settlement still at preliminary approval.
• 1 July 2026: Florida's s. 509.214 starts treating card surcharges as a disclosed operations charge for restaurants.
• 9 June 2026: preliminary approval of the revised Visa and Mastercard settlement.
• 1 November 2025: Oklahoma allows surcharges up to 2% or cost (SB 677).
• 1 January 2025: Kansas allows surcharges with a posted notice.
• February 2024: New York's GBL 518 current text in force; Visa updates its surcharging Q&A.
• December 2023: New Jersey publishes its surcharge FAQ for P.L. 2023, c.146.

Can TablePort handle this for you?

TablePort takes card payments through Stripe and publishes its rate, so the effective-rate worksheet starts from a number you can see.

1. Take cards, Apple Pay and Google Pay on a Stripe Terminal reader (Chipper 2X or M2) or with Tap to Pay. The US in-person rate is 2.6% + $0.10 for standard cards and 3.5% + $0.10 for premium cards such as Amex, international and corporate cards.
2. Set your own tip prompts; payouts follow your Stripe payout schedule.
3. At close, reconcile cash, voids, comps and tips on one screen, and export daily sales, tips and tax for your accountant.

One honest limit: TablePort does not add credit card surcharges. If you choose to surcharge, that decision and its signs stay with you and your adviser. See the POS page.