As of January 1, 2025, Minnesota’s updated statutes (Minn. Stat. 325D.44 & 325G.051) require that all mandatory fees, including credit card surcharges, be included with the advertised price of goods and services. Failing to comply could result in civil fines of up to $500 per violation.

Business owners are no strangers to credit card transaction fees. For years, many have passed those fees directly to customers, adding a small surcharge for credit card payments. That practice isn’t changing.

But what has changed under Minnesota’s updated statutes is how you disclose those fees. No longer can you only hang a sign on your front door or cash register saying, “A surcharge applies to credit card transactions.” The fee must be clearly stated upfront in pricing (yes, the signage can stay)—or on menus, invoices, or on your website - anywhere prices are advertised.

One of the big requirements, when handling in-person / in-store transactions, that many businesses don't know about is the requirement to verbally inform their customers about the surcharge prior to "running the card." This allows the customer the right to refuse the transaction or offer alternative payment, like cash. Here's that requirement from the statute:

If the sale or lease of goods or services is processed in person, the seller or lessor informs the customer of the surcharge both orally at the time of sale and by a sign conspicuously posted on the seller's or lessor's premises. [325G.051, Subdivision 1 (1)]

On website transactions, the surcharge must be disclosed as part of the subtotal prior to completing the transaction, the idea is the same: giving customers a full picture of their final cost, surcharge included, prior to submitting payment.

If the sale or lease of goods or services is processed through a website or mobile device, the seller or lessor informs the customer of the surcharge by conspicuously posting a surcharge notice during the sale, at the point of sale, on the customer order summary, or on the checkout page of the website. [325G.051, Subdivision 1 (2)]

And the same goes for telephone transactions: a business rep needs to disclose the surcharge prior to charging customers' credit cards.

If the sale or lease of services is processed over the telephone, the seller or lessor informs the customer of the surcharge orally. [325G.051, Subdivision 1 (3)]

Note: This statute does not require businesses to "re-price" all items to include the surcharge amount. A business certainly could increase their prices to cover a surcharge fee, but then they most likely would not charge an additional surcharge, having already baked that cost into the product/service price.

What’s Changing with Minnesota’s Credit Card Surcharges?

The new version of the statute clarifies that Minnesota businesses can add a credit card surcharge as a separate line item, provided they disclose it through signage and verbal notification at the point of sale (in-store); verbally (telephone transactions); and prior to payment (website transactions).

• Any surcharge, mandatory fee, or automatic gratuity must be included along with the advertised price.
• Businesses can still offer a discount for cash payments.
• The surcharge cannot exceed 4% of the purchase price due to federal law (AFARS 6-6. Surcharges), even though Minnesota law allows up to 5%.
• Store-branded credit cards cannot be subject to surcharges.
• Debit card surcharges remain illegal in all states, including Minnesota.
• Surcharge fees are subject to state sales and use tax.

How Does This Affects Businesses in Austin?

For local businesses, this might mean a shift in how you communicate costs to customers. Whether you run a café, retail shop, or service-based business, you must present any surcharge fees with your listed prices, instead of only tacking them on at checkout.

What is Compliant?

IN-STORE:

• Non-compliant: Listing a product for $10 and adding a $0.40 credit card surcharge at checkout without informing your customer.
• Compliant: Listing a product for $10 on a website, display board, menu, etc. while noting via both signage and orally that a 4 percent surcharge will be included.

ON THE PHONE:

• Non-compliant: Accepting payment over the phone without disclosing surcharge fees prior to charging a credit card.
• Compliant: Informing the customer of the surcharge rate, the amount of the surcharge for their transaction, and a subtotal with the product/service.

Other Examples

• If your restaurant adds a 20% service charge to all bills, your menu or advertisement must clearly state: “All bills include a 20% service charge.”
• If you’re a hotel charging a resort fee, your website must show the total cost upfront, not just the base rate.
• If you advertise a $10 drink special but add a 5% automatic service fee, your ad must mention that clearly.

Actionable Steps for Compliance with Minnesota’s Deceptive Trade Practices Act

1. Emphasize a discount for cash transactions
2. Update signage, menus, and webstores
3. Train your staff - Ensure employees understand the new law and how to communicate surcharges to customers.
4. Audit your sales and tax reporting
   • Since surcharge fees are taxable, ensure they are included in your gross receipts.
   • Work with an accountant to confirm compliance with Minnesota’s sales tax regulations (Minn. Stat. 297A.62).
5. Explore cost-saving alternatives - Consider negotiating lower credit card processing fees with your provider.

Why This Matters for Austin Businesses

No shopper or diner likes to be surprised at check out—and no one likes the credit card fees, except the credit card companies—but this law aims to prevent hidden fees and deceptive pricing, ultimately benefiting both businesses and consumers. By proactively adjusting your pricing and payment policies, you can avoid fines and maintain customer goodwill.

For further details, consult the full statute (Minn. Stat. 325G.051) or seek legal guidance to ensure full compliance.