Massachusetts Credit Card Surcharge Law (c. 140D, s. 28A)

Read this first

This page is general information, not legal advice. It is current as of September 16, 2026, and quotes or summarizes the primary sources listed at the end. Surcharge rules change through new laws, amendments and court cases, so check current rules with your processor and your own counsel before you add a card fee. CELER Merchants is an independent merchant services agent, not a law firm or a processor. The statute text quoted here is from the Massachusetts Legislature's General Laws website. That page does not show an amendment date, and we could not load the Division of Banks' published opinions on this section, so ask counsel whether any agency interpretation affects your setup.

What section 28A says

Section 28A(a)(2): "No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means." Section 28A(a)(1) says that for a credit card usable with sellers other than the card issuer, the card issuer may not, by contract or otherwise, prohibit a seller from offering a discount to induce the cardholder to pay by cash, check or similar means rather than use a credit card. Section 28A(b) says that in any sales transaction, a discount from the regular price offered to induce payment by cash, check or other means not involving an open-end credit plan or a credit card is not a finance charge under section 4 if the discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously.

What the statute does not say

Section 28A does not mention debit cards, set a percentage cap, prescribe sign wording, or state its own penalty. Chapter 140D is Massachusetts' consumer credit cost disclosure law, and we have not summarized its general enforcement provisions here. We could not verify any regulation under 209 CMR that adds to section 28A, or the content of Division of Banks opinions on convenience fees and third-party fees, because the mass.gov pages returned an error when we checked. Treat those as open questions for counsel rather than as permission.

Penalties and enforcement

Section 28A itself does not set a penalty, and we are not going to guess at one. Chapter 140D is administered in part by the Massachusetts Division of Banks, which publishes opinions on the chapter. Before you add any card fee or label a fee as a convenience or service fee, ask your processor and counsel how the Division and the courts treat it.

What Massachusetts merchants can do instead

1. Build card acceptance costs into your regular prices. 2. If you want to reward cash or check, offer a discount from your regular price, offer it to every customer, and disclose it clearly and conspicuously, which is the condition in section 28A(b). 3. Do not add a percentage fee at the register or a card-only line item on the receipt: that is the surcharge section 28A(a)(2) prohibits. 4. Be careful with programs sold as dual pricing or non-cash adjustments. Section 28A permits a discount from the regular price for cash, check or similar means; it does not mention dual pricing, so the program has to genuinely work as that discount. Have counsel review it.

How card network rules fit in

Every US merchant who accepts Visa also has to follow Visa's rules, whatever state law allows. Visa's U.S. Merchant Surcharge Q&A says to notify your acquirer at least 30 days before you start surcharging, to limit surcharging to credit cards (debit and prepaid cards cannot be surcharged, even when a debit cardholder selects "credit"), to keep the amount at or below your merchant discount rate for that card or 3%, whichever is lowest, and to disclose the surcharge at the point of entry, at the point of sale and on every receipt. Mastercard, American Express and Discover set their own conditions, so check current rules for each network you accept. Where a state rule and a network rule differ, follow the stricter one. In Massachusetts the state ban on credit card surcharges applies regardless of what a network would otherwise allow, so the practical Visa question for Massachusetts locations is whether a discount program is set up and disclosed correctly.

If you also sell in other states

1. List every state where you sell in person, online or by phone. 2. Do not copy a surcharge setting from one location to another: New York requires the card price to be posted (GBL 518), Colorado caps surcharges at 2% or the merchant discount fee with statutory sign wording (C.R.S. 5-2-212), and California's statute and enforcement need counsel review. 3. Ask your processor whether surcharging can be switched off per location or per website. 4. Re-check each state's rules at least once a year. Connecticut also bans surcharges but its statute adds specific notice rules for discounts (in store, online before checkout and verbally) and a CUTPA penalty, so a Connecticut setup is not automatically a Massachusetts setup, or the other way round.