Take a look at the business article Little-Known - But Important - Credit Card Rules for Merchants. You will have to check with your state or area for specific laws. Another thing to consider is the agreement between you and the credit card company. Some do not want additional fees, so you want to make sure you do not violate their contract. Does anyone have some advice to ninemile? JimD

As a consumer I was concern about this to and actually I was disgusted on what I have found out after I read a certain article before. It is illegal for merchant to pass the credit card fee to customers but just like any law people will tend to find a loop hole to benifit them It's illegal to add a fix percent to product when purchase using a credit card but if they offer a discount instead on cash purchase (loop hole) it is legal. So as long as the law is not ammended merchant will continue to use this loop hole and pass on the credit card fee to consumer in the form of cash discount

A lot of businesses charge an extra 3% to process credit cards. It cuts into your profits, which is the lifeblood of your business! I dont get charged when people use cash or checks, but I have to pay when someone uses a credit card/bank card??? Why should I have to pay?? My business doesn't yeild a huge profit on each sale and demands quanity. I only profit about 6 dollars on each service and when someone uses a credit card my profit goes to $4.50! How do you think the credit card companies give you all the 'points' you get when you sign on for a new card? Small business! America has the highest interchange rates (the actual rates the processors charge to process the CC) in the world by 5 fold!! As posted previously, I offer a 'cash or check' discount proudly and explain to people that I cannot take such a beating on my profits just for the convienence of them using a credit card, and 99% of customers say they had no idea they charge me and happily pay cash or write a check. The others that insist on using plastic do not get a discount. Perfectly legal in all 50 states!! Just have to say 'cash and check' discount!!

@davedyer79 - as I said as long as there is a loop hole in the law and the credit card company knows about it. That merchant can used the cash discount. There is no incentive for the credit card company to work with merchant. I mean why should they ? but if this loop hole is somewhat plug I am sure that credit card company will work with you guys. Just my opinion.

Besides it being legal or not, you should look at the credit card merchant agreement, it most cases it states that you cannot charge extra for using their card, and you cannot refuse a card on certain sales (you must accept it for all purchases). But as gretcyshaw said, the loophole is with giving cash discounts, and many businesses do that, especially those with high value/low margin (e.g. computer hardware stores) You should also think about the implications of doing such, it can have a negative effect on your income. I remember once I stopped going to a restaurant because it required cash payments under a certain amount, which I meant I had to have cash all the time. Few weeks after the owner reversed the policy because it seriously affected their business. My best advice, is to increase your overall prices by the average amount lost on sales, so you are passing it to the consumer without it being obvious (and annoying) in most cases the consumer will not care if the prices are 1 or 2% higher (except expensive merchandize of course)

@Business90: I have also heard that you are not able to charge extra for using credit cards or refuse a card on certain sales, but why exactly is this? The only reason I can come up with is they do not want you to deter your customers from using credit cards for payment so they can collect on the transaction fees. But Business90 is correct, I also had a similar situation back in college with a nice little pub that required cash for any purchase under $15. Food was great and the drink specials were good, but having to pay cash kept us from going there. Especially because the pub did not have an ATM and you had to walk to the closest gas station to take out cash in the middle of an Illinois winter.