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Update on State Laws for Credit Card Surcharges

Posted: March 4, 2013

As reported in previous issues of the NFDA Bulletin and Memorial Business Journal, one aspect of the settlement of a seven-year class action antitrust settlement involving VISA and MasterCard permitted funeral homes in certain states to impose surcharges on consumers using credit cards beginning January 27. According to T. Scott Gilligan, general counsel of the National Funeral Directors Association, a key element to the settlement from the standpoint of funeral service would be VISA and MasterCard's agreement to eliminate their current prohibition against merchants imposing surcharges on consumers who pay with credit cards.

VISA and MasterCard had been sued in a class action lawsuit involving the seven million retailers that accept those credit cards, having been accused of unlawfully conspiring to set the swipe fees that merchants pay the two credit card companies. Both companies have agreed to a $7.2 billion settlement, the largest antitrust settlement in U.S. history.

The 12 states that currently have bills pending or proposed that would prohibit a merchant from imposing a credit card surcharge against a consumer who pays with a credit card are Hawaii, Rhode Island, Illinois, South Carolina, Kentucky, Tennessee, Missouri, Utah, New Jersey, Vermont, Pennsylvania and West Virginia.

The following 10 states that currently prohibit merchants from imposing a surcharge on consumers who pay by credit card are California, Maine, Colorado, Massachusetts, Connecticut, New York, Florida, Oklahoma, Kansas and Texas.

The remaining 28 states that do not have a prohibition against credit card surcharges and have no bills introduced to prohibit surcharges are: Alabama, Alaska, Arizona, Arkansas, Delaware, Georgia, Idaho, Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, South Dakota, Virginia, Washington, Wisconsin and Wyoming.

Gilligan noted that prior to imposing a credit card surcharge, funeral homes must provide a 30-day written notice to VISA, MasterCard and their credit card banks or processors of their intent to add a surcharge. For VISA, merchants can submit a notification form by going to For MasterCard, go to to post the 30-day notice. After notifying VISA and MasterCard, also notify the bank or financial institution that processes your credit cards of your intent to impose a surcharge.

The surcharge may only be imposed on credit cards, not debit cards. The amount of the surcharge may not exceed the amount of the swipe fee paid by the funeral home on the particular credit card. Therefore, funeral homes will need to know how much a swipe fee is on each card if they intend to fully recoup the amount of the swipe fee.

Additional Information:

Funeral Homes May Impose Credit Card Surcharges Starting Jan. 27 (January 21, 2013)

Information For Funeral Homes Using the NFDA-endorsed Bank of America Credit Card Processing Program (February 8, 2013)

BA Merchant Services is NFDA's endorsed provider of credit card processing services. Click here for more information about this exclusive benefit of NFDA membership.