Charged a Credit Card Fee at Checkout? You May Be Owed a Refund
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Written by
Gabrielle Olya
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Edited by
Levi Leidy
If you’ve ever noticed a 3% fee added to your credit card purchase, you’re not alone. These surcharges are becoming more common – but in many cases, they’re illegal. And you might be able to get that money back.
Here’s how to know if you’re due a refund for an illegal credit card fee.
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When a Credit Card Surcharge Might Be Illegal
While credit card surcharging is legal in most states, the actual laws and rules governing it vary. The only states where surcharging is outright illegal are Connecticut, Maine, Massachusetts and California. However, even if you live in a state where surcharges are legal, it’s important to know the details of these laws.
“Consumers should check their state’s specific laws to understand allowable surcharge amounts – which may not always be 3% – how those fees must be disclosed and when they can be applied,” said Eric Cohen, CEO of Merchant Advocate. “If a merchant violates these rules, the surcharge is illegal and consumers should protect themselves against it.”
For example, Kansas requires merchants to include credit card fees in the listed price to impose a surcharge, and Georgia only allows credit card surcharges if other payment methods are also accepted.
If you’re using a debit card, however, you should never be charged an additional fee. Since the creation of the Durbin Amendment in 2010, surcharges on debit cards have been prohibited nationwide.
How To Dispute and Recover Illegal Credit Card Fees
Consumers are protected by a process called a “chargeback,” which allows them to report a charge to their credit card company, dispute it and receive a refund.
“While commonly used in cases of credit card fraud, chargebacks can also be used to challenge unfair fees from merchants,” Cohen said. “This not only helps consumers recover their money but also discourages merchants from continuing to illegally surcharge.”
For merchants, chargebacks have financial consequences beyond refunds, including penalties, higher processing fees and potential account restrictions.
“This makes chargebacks one of the most effective tools consumers have to stand against excessive and illegal surcharging fees,” Cohen said.
Why Credit Card Fees Exist – and How To Avoid Them
While surcharges only apply to credit card purchases, surcharging’s effects can still be felt by those not using a credit card, as businesses raise prices to try and offset costs.
“These surcharges stem from rising processing fees charged by payment processors, which are then passed down through credit card companies to merchants to consumers,” Cohen said. “While fees are usually 1%–3% of the purchase, a portion goes to processors in ways that aren’t transparent to consumers.”
To avoid surcharges as much as possible, Cohen recommends the following:
- Paying with cash or debit whenever possible.
- Checking for signage or receipt details. Businesses must disclose surcharges before payment.
- Closely monitoring bank statements to check for any additional surcharges to report to your bank.
- Disputing charges if a surcharge is incorrectly applied, such as when added to a debit card transaction.
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