If another merchant strayed from making these clear disclosures, and instead misled or surprised customers, then they may face a legitimate enforcement of the California law.

There are limits on what merchants can charge and conditions that merchants must meet in order to charge checkout fees — the next part of this article will explore these in depth.

If your business operates in any of the 10 states (CO, CT, FL, KS, ME, MA, NY*, OK, TX) whose state laws prohibit surcharging, you may not charge checkout fees in that state.

The settlement will allow businesses to reduce the impact of credit card processing fees.

However, there are many rules businesses must follow in order to charge checkout fees, as well as pros and cons that should be considered before deciding if surcharging your customers when they use credit cards is the right move for your business.

Card Fellow has an excellent guide to convenience fees, and the rules for these have not changed.

What has changed are the rules regarding surcharging or checkout fees.

Checkout fees have historically been defined as a fee charged to consumers who use credit cards that would not have been charged if the consumer had paid with cash or a check.

Visa and Master Card have always prohibited these fees as part of their merchant agreements; Discover and American Express allowed them, but forbid businesses to surcharge their cards differently than any other brands.

Razi explains, "Under this authoritative, controlling precedent, we’re now serving all California merchants that seek the single-sticker pricing model—which, in real-world terms, would be quoted as, “, with a 3.5% surcharge for credit.” Keep in mind that California has laws that still apply regarding deceptive pricing, so you may want to consult an attorney if you're considering imposing a credit card surcharge on a business operating in California to ensure you comply with the recent decision and all applicable laws.

More information is available at the Office of the Attorney General of California's website If you're allowed by state law to charge checkout fees, here's the process to get started: However, surcharging comes with several disadvantages that make it less appealing.

Finally, there is a loophole in these state laws which allow you to offer a discount to customers who pay by cash or check.