🔁 Dual Pricing vs. Surcharging: What’s Legal, What Works, and What Turns Off Customers?

By Robert Skinner | WBN News | July 18, 2025

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With credit card fees on the rise, small businesses are looking for ways to protect their margins. Two of the most talked-about strategies are surcharging and dual pricing — but they’re not the same.

Here’s what you need to know:

🔁 What Is Dual Pricing?

Dual pricing shows two separate prices at checkout: one for cash and one for credit.
It’s most commonly seen at gas stations, but is expanding to retail and food service.

✅ Legal in all 50 U.S. states and across Canada
✅ More transparent — customers choose their price
✅ Seen as more fair than tacking on a surprise fee
🔻 Requires clear signage and updated POS setup

💳 What Is Surcharging?

Surcharging adds a separate fee (e.g., 3%) on top of the sale if a customer pays with credit.

⚠️ Not legal in every state or province
⚠️ Cannot be applied to debit or prepaid cards
⚠️ Must follow strict disclosure rules and caps
✅ Easier to implement than dual pricing in some cases

📝 In Canada, surcharging credit card purchases is legal — but you must notify the card brands in advance and clearly inform customers at the point of entry and payment.

🧠 What Works Better?

• Dual pricing tends to result in fewer complaints and stronger legal protection.
• Surcharging is simpler to add, but carries more risk if not properly disclosed.

If you’re planning to pass card costs to your customers, know your local laws — and consider how the approach will affect your brand image.

🧰 How to Decide What’s Right for Your Business

The best approach depends on your location, industry, and customer base.

• If you’re in a high-cash-volume business (e.g., convenience store, auto repair), dual pricing may be better. It encourages cash without alienating credit users.
• If you run a service business with high card volume (e.g., digital agency, dental practice), surcharging may offset fees efficiently — as long as it’s clearly disclosed.

Just know: In both cases, transparency is key.

🌐 Canada vs. U.S. Considerations

• Canada: Surcharging has been allowed since 2022 after a class action lawsuit. Merchants must notify Visa/Mastercard 30 days in advance and post clear signage. Dual pricing is legal and often preferred for in-person sales.
• U.S.: Surcharging is still prohibited in a few states (e.g., Connecticut, Massachusetts) and restricted for some industries. Dual pricing is legal nationwide, but implementation varies by sector.

📋 Best Practices If You Implement Either Model

1. Use signage at the door, counter, and checkout screen. Surprises frustrate customers.
2. Program your POS system to show both prices or apply fees automatically and compliantly.
3. Train staff to explain the difference confidently and without defensiveness.
4. Review your processor’s rules — some prohibit or charge extra for these practices.

Final thought: These strategies may protect your margins, but they also affect trust. The key isn’t just legality — it’s clarity.

Note from the Author: I am an experienced business systems developer and enjoy helping small business owners increase their bottom line. Feel free to connect. Give me a call at +1 604-220-4750 or connect on LinkedIn:

"Also I have openings for News Contributors for the Delta and Richmond Editions"

https://www.linkedin.com/in/rlskinner/

WBN News - South Delta Edition

Robert Skinner - Publisher

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