Kansas Merchants Now Allowed to Charge Credit Card Surcharges

Kansas merchants can now legally impose surcharges on credit card transactions, a significant change in state law that took effect on January 1, 2025. This new regulation allows businesses to add an extra fee to credit card payments, provided they give clear notice to customers before the transaction occurs. The change comes after a federal court ruling deemed the previous ban on surcharges unconstitutional, paving the way for this new policy that could impact consumer spending habits across the state.

Key Takeaways

Kansas merchants can now add surcharges to credit card transactions.
Clear notice must be provided to customers before the sale.
The previous ban on surcharges was ruled unconstitutional in 2021.
The maximum surcharge allowed is capped at 4% by federal law.

Background Of The Law Change

For decades, Kansas had a law that effectively banned surcharges on credit card transactions, allowing only cash discounts. This policy was challenged in 2021 when a federal court found it unconstitutional, citing violations of the First Amendment. As a result, the state legislature amended the law, allowing merchants to impose surcharges as long as they inform customers clearly and conspicuously at the point of sale.

Implications For Businesses

The new law has sparked mixed reactions among business owners. Some see it as an opportunity to offset the costs associated with credit card processing fees, which can be as high as 3.5% per transaction. Derek Sorrells, a business owner in Wichita, expressed optimism about the change, stating, "On every $100, we’re losing $3.05. Over the course of the year, it adds up to a significant amount of money."

However, not all business owners are eager to implement surcharges. Many are concerned that adding extra fees could deter customers. Derek Burrows, who has owned his store for over 13 years, noted, "I don’t want to add a charge to my customers. It’s a whole other level of confusion, and so many shop almost exclusively with a credit card that it would be a burden on them."

Consumer Reactions

Consumer responses to the new surcharge policy are varied. Some shoppers understand the rationale behind the surcharges, recognizing that businesses need to cover their costs. Others, however, feel frustrated, especially those who have become accustomed to using credit cards for everyday purchases. Peggy Doyebi, a frequent credit card user, remarked, "Now they’re going to charge us for leading us down that path."

Future Outlook

As businesses navigate this new landscape, the response to the surcharge law is expected to be mixed. While some may adopt the practice to mitigate processing fees, others may choose to avoid it to maintain customer loyalty. The Sedgwick County District Attorney’s Office has emphasized the importance of transparency, urging merchants to provide clear signage regarding any surcharges at the point of entry or sale.

In conclusion, the ability for Kansas merchants to add surcharges to credit card transactions marks a significant shift in the state’s retail landscape. As businesses adapt to this change, both consumers and merchants will need to navigate the implications of this new law carefully.