Three programs let a business stop paying card fees out of its own margin. They are sold under overlapping names, configured differently on the terminal, and governed by different rules. Getting the wrong one, or the right one set up as the wrong one, is how merchants end up with a letter from their processor and a bad review. Here is the comparison.
Side by side
| Surcharge | Cash discount | Dual pricing | |
|---|---|---|---|
| Posted price | One price, the cash price | One price, the card price | Two prices, cash and card |
| What happens at checkout | A percentage is added for credit cards | A discount is taken for cash | Customer picks a price by choosing tender |
| Applies to debit and prepaid | No, prohibited | Yes | Yes |
| Cap | 3% for Visa (April 2023 onward); must not exceed cost of acceptance | No surcharge cap; discount equals cost of acceptance in practice | Same as cash discount |
| Registration | 30 days’ written notice to acquirer | None | None |
| State restrictions | Prohibited or restricted in CA, CT, MA, ME; disclosure rules in NY, CO, MN and others | Permitted in all 50 states | Permitted in all 50 states |
| Receipt | Shows base price plus surcharge line | Shows price paid and tender | Shows price paid and tender |
| Merchant’s processing cost | Recovered on credit only; debit still costs | Recovered on all cards | Recovered on all cards |
| Customer perception | Feels like a penalty | Feels like a reward for cash | Feels like a choice |
| Our recommendation | Only in permitted states for merchants insisting on one posted price | Fine, but dual pricing is clearer | Default for almost everyone |
Rules are card-brand rules as summarized in 2026 compliance guides plus state law, and they change. This is a description of how we set programs up, not legal advice.
Surcharging
You post one price. When a customer pays with a credit card, the terminal adds a fee, up to 3% for Visa transactions, and the receipt shows the base price, the surcharge and the total. You must have notified your acquiring bank in writing at least 30 days before starting, the surcharge cannot exceed your actual cost of acceptance, and it can never be applied to debit or prepaid cards, even when they are run as credit.
The debit rule is the practical problem. Depending on the business, 30% to 60% of card transactions are debit. A surcharge recovers nothing on those. A restaurant surcharging 3% on $60,000 a month with half debit recovers about $900 of a $1,500 processing bill, and pays the rest.
The state rules are the other problem. California, Connecticut, Massachusetts and Maine restrict or prohibit it. New York requires the total card price be displayed, which turns a surcharge into dual pricing by another name. Colorado and Minnesota have their own disclosure rules and caps.
When surcharging makes sense: a merchant in a permitted state with a mostly credit-card customer base (travel, luxury goods, B2B) who wants one posted price. Otherwise, no.
Cash discounting
You post the card price. Customers who pay cash get a discount equal to the cost of acceptance. Civil Code and card-brand rules have long permitted discounts for cash; the Durbin Amendment protects a merchant’s right to offer them. There is no cap tied to the surcharge rule, no notice to the acquirer, and the discount applies regardless of card type because nothing is being added.
The weakness is presentation. A single posted price with a small “cash discount available” sign leaves customers feeling they paid a hidden fee, and it leaves sloppy dealers room to configure the terminal to add a “non-cash adjustment” line, which is a surcharge wearing a cash-discount name. That configuration is what gets merchants flagged.
Dual pricing
You post both prices. Menus, shelf tags or a register sign show the cash price and the card price. The customer-facing screen shows both totals before the card is tapped. The customer chooses tender and pays the matching price. The receipt shows the price paid and the tender type, with no fee line.
Economically it is a cash discount. Legally it is a cash discount with full disclosure. Practically it is the version customers understand, because two prices at the pump have trained everyone for forty years. It applies to credit and debit, has no cap tied to surcharge rules, needs no registration, and is the model that fits California’s price-transparency law because the displayed card price is the full price. Details on the California rules are in is dual pricing legal in California.
Merchant’s processing cost under dual pricing: zero. The card price funds it.
What the three look like on a $40 sale at 3.99%
| Surcharge | Cash discount | Dual pricing | |
|---|---|---|---|
| Posted | $40.00 | $41.60 | $40.00 cash / $41.60 card |
| Credit card customer pays | $41.20 (3% cap) | $41.60 | $41.60 |
| Debit card customer pays | $40.00, merchant eats the fee | $41.60 | $41.60 |
| Cash customer pays | $40.00 | $40.00 | $40.00 |
| Receipt | “Subtotal $40.00, Surcharge $1.20, Total $41.20” | “Total $41.60, Card” | “Total $41.60, Card” |
How to tell which one your terminal is actually running
Look at a card receipt. If there is a line called fee, surcharge, adjustment or non-cash adjustment, you are surcharging, whatever the salesperson called it. If the receipt shows a single total and a tender type, and the customer saw two prices before paying, you are dual pricing. If you are in California and the receipt has a fee line, fix it this week. We do that for merchants who did not sign with us, too.
Setup
Dual pricing runs on Clover, Dejavoo, Exatouch, PAX and most terminals made in the last five years. The processor enables it on the merchant account and sets the percentage. Signage, menu wording and a staff script complete it. About a day. The Clover-specific walkthrough is in dual pricing on Clover.