Last updated: Nov 12, 2025, 12:35 PM
This content is provided for informational purposes only and is not intended as legal, accounting, tax, HR, or other professional advice. You are responsible for your own compliance with laws and regulations, including card network rules. You should contact your attorney or other relevant advisors for advice specific to your circumstances. Note that this article applies to U.S. and U.S. territories only. The development, release and timing of any products, features or functionality remain at the sole discretion of Toast, and are subject to change.
A credit card surcharge is any fee added to a guest’s bill for using a credit card instead of another form of payment. In a nutshell, credit card surcharging is when restaurants charge guests a fee for credit card acceptance as a means to recoup some or all of the merchant’s processing costs. However, this practice must follow card network rules closely. Under no circumstances may a debit card or prepaid card be surcharged.
Toast’s Credit Card Surcharging product is the only way to apply credit card surcharges on the platform today in a manner that complies with card brand rules*. Key features include:
Toast Credit Card Surcharging is available to all eligible U.S. customers. Merchants in states where surcharging is prohibited — including Connecticut, Maine, and Massachusetts — are not eligible for Toast’s Credit Card Surcharging solution. Merchants that have a direct Card Acceptance Agreement with American Express are not eligible for Toast’s Credit Card Surcharging functionality. These agreements include provisions governing the merchant’s surcharging of American Express cards. Additionally, certain merchants that participate in American Express’ OptBlue program are not eligible for Toast’s Credit Card surcharging functionality.
Eligible merchants that wish to proceed with Toast’s Credit Card Surcharging product should first review the card network requirements in detail (summarized below for informational purposes only). Learn more about how to . And prior to implementing any surcharge, eligible merchants should first review any laws and rules applicable in their jurisdiction, and take any additional steps necessary to comply.
* - Toast's Credit Card Surcharging product helps merchants comply with card brand requirements. Merchants remain responsible for compliance with any additional disclosure or other legal requirements that may apply in their state.
There are many card network rules and requirements that need to be followed to maintain compliance and avoid financial penalties. Below is some high-level information on these rules for your reference. This list is not exhaustive, and additional requirements may apply. As mentioned above, Toast’s Credit Card Surcharging product is built to help merchants maintain compliance with the card brand requirements below; however, it is important that Toast merchants understand the requirements to ensure they are met.
Surcharges may be applied only to credit cards — under no circumstances may a debit card or prepaid card be surcharged. This includes transactions where a debit or prepaid card is processed as credit (processing with a signature instead of a PIN). Surcharging debit cards will immediately take a merchant out of compliance with card network rules.
Note: Toast’s Credit Card Surcharging is designed to automatically apply the surcharge to credit card transactions, but not debit or prepaid transactions, to help merchants maintain compliance. This also helps reduce surcharging training and avoids introducing additional human errors by staff manually entering surcharges tableside.
Credit card surcharge percentages imposed upon guests are capped at either the merchant’s current discount rate (as specified in the card network rules, such as total card processing fees over the last month divided by credit card sales over the same period as a percentage) or 3%, whichever is lower. Under no circumstances can a merchant assess a credit card surcharge above 3%. Because of this, it is important for any card surcharge to be assessed as a percentage of a guest’s ticket rather than a fixed fee, because a fixed fee may exceed 3% depending on the guest’s ticket amount. Merchants located in Colorado may be subject to limitations on the rate at which you surcharge credit cards.
Note: Toast’s Credit Card Surcharging recommends a compliant surcharge rate to help merchants maintain compliance and will not allow merchants to exceed the cap set by the card networks. Additionally, surcharges are calculated only on the subtotal of a transaction, excluding taxes and tips. This ensures that the surcharge percentage aligns strictly with card network requirements.
Card brand rules require that clear and conspicuous signage must be posted at the point of entry (e.g., the outside face of the restaurant, entryway, reception desk, waiting area, etc.) as well as at the point of sale or point of interaction (e.g., next to the cash register, on the menu, ordering kiosk, etc., as well as on the online ordering website, if applicable). The signage must include a statement that the surcharge only applies to credit cards, along with the specific credit card surcharge percentage. Guests must be given the opportunity to opt out of their order or pay by other means (such as cash or debit card) before the surcharge is applied to their ticket.
Beyond signage, merchants must have a clear, separate line item on the guests’ receipts (e.g., Credit Card Surcharge _%) that explicitly indicates that it is a surcharge applied for a credit card payment as well as stating the surcharge percentage that was applied and the resulting dollar amount. For example, a 2% card surcharge on a guest’s $50 meal may have a line that reads Credit Card Surcharge (2%): $1.00 as a line item. Finally, applicable laws and regulations may impose different or additional disclosure requirements with which merchants must comply in their location.
Note: Toast’s Credit Card Surcharging product includes signage and disclosure templates that meet card brand rule requirements, but it is a merchant’s responsibility to ensure that they are physically posted and visible to guests. In addition, merchants may need to make adjustments depending on the unique circumstances of their business, or requirements under applicable law and regulations. The product automatically provides disclosures on guest-facing displays and ensures that all receipt requirements are met under card brand rules.
Surcharging practices must apply across all credit card brands that a merchant accepts — that is, if a merchant is participating in credit card surcharging, they must apply the same surcharge for credit cards of every network (Visa, Mastercard, Discover, American Express) and they must surcharge on the same terms for every credit card.
Note: Toast’s Credit Card Surcharging product is designed to automatically apply the surcharge to all credit card transactions in supported channels, regardless of the card network, to help merchants maintain compliance.
Mastercard requires that merchants that intend to implement credit card surcharges notify Mastercard at least 30 days before they begin surcharging. You can find more information regarding how to notify Mastercard of its surcharging information here: .
Visa requires that a merchant notifies its acquirer 30 days in advance of beginning to surcharge.
Note: Toast’s Credit Card Surcharging product automatically handles the registration process and ensures that merchants cannot begin surcharging earlier than what is allowed by the card networks.
To confirm surcharging application, utilize the following reports available in Toast Web:
In addition to card network surcharging rules, merchants must follow federal and state laws applicable to surcharging and laws prohibiting deceptive or misleading disclosures. Laws change from time to time and vary by state. Currently, the following states have laws that prohibit surcharging: Connecticut, Maine, and Massachusetts. Additionally, merchants located in Colorado may be subject to limitations on the rate at which they surcharge credit cards.
Beyond these specific state-level prohibitions on credit card surcharging, other laws may apply to your business or location that impose additional or different disclosure requirements, or other legal requirements. Merchants are responsible for ensuring compliance with any such laws, as these are constantly evolving. For example, some jurisdictions may require you to include the surcharge in your posted menu prices or have other disclosure requirements, and you are responsible for making appropriate updates. Be sure to check whether any such requirements apply to you, and take any steps necessary to comply.
Toast’s Credit Card Surcharging product is intended to enable merchants to assess credit card surcharges to their guests in a manner that complies with card brand rules.
Merchants attempting to use any other Toast products or features to assess surcharges bear a high risk of non-compliance with various rules set by card networks, which may result in card network fines — in addition to the risk of losing business — for one key reason: credit card surcharging requires strict compliance. Failure to maintain compliant credit card surcharging practices can result in significant fines and potential further penalties for continued noncompliance with card network rules (e.g., Visa and Mastercard). Using the service charge feature or any other feature offered by Toast, other than the Credit Card Surcharging product, to add a surcharge will result in non-compliant surcharging due to the charge being applied universally to all payment products, for example.
Except when using the purpose-built Credit Card Surcharging product, the use of other Toast products and features to attempt to assess a surcharge carries a risk of fines or penalties for noncompliance with card network rules with an initial violation starting at $1,000, which may escalate for repeated violations, and are subject to change. Visa is actively enforcing non-compliance, and other card networks could follow suit. Toast may disable any service charge or other use of our platform that leads to noncompliant surcharging (or other noncompliance) at any time.