Surcharging allows you to offset credit card processing costs by passing a fee directly to the consumer at the time of sale. Your ThriftCart Payments company charges you a standard default fixed flat processing fee, and if you become enabled for surcharging, you can assess a surcharge to your customers, up to 3% (the maximum permitted by the card brands), effectively reducing your net total cost of processing.
Example: A merchant processing $50,000/month in credit card volume at an effective rate of 2.5% could recover up to $1,250/month in processing costs by enabling a 2.5% surcharge.
We have made Surcharging available to ThriftCart. You will need to reach out to your support team (see the contact information at the bottom of this article) to arrange an appointment with an onboarding agent to activate the feature for your store(s).
The surcharge amount cannot exceed your actual cost of processing, or 3%, whichever is less. This is restricted by each of the card brands.
Only merchants in legally permitted jurisdictions may enable surcharging. ThriftCart Payments will not support surcharging in restricted states and DealHub will block surcharge quotes for merchants in those states.
|
State / Region |
Quilt Supported? |
Notes |
|
CA |
No |
Surcharging is restricted. |
|
CT |
No |
Surcharging is prohibited. |
|
MA |
No |
Surcharging is prohibited. |
|
ME |
No |
Surcharging is restricted. |
|
MN |
No |
Surcharging is restricted. |
|
NY |
No |
Surcharging is restricted. |
|
TX |
No |
Surcharging is restricted. |
|
NV |
No |
Surcharging is restricted. |
|
PR |
No |
Surcharging is prohibited. |
|
CO |
No |
Surcharging is capped at 2%. |
|
OK |
No |
Surcharging is capped at 2%. |
|
All other US states |
Yes |
Allowed up to 3%. Signage and disclosure requirements must be met. |
|
Canada |
TBD |
Planning on supporting it through P5 terminal |
Certain transaction types are exempt from surcharging due to card brand rules. The PayFac handles this automatically, but if you have questions, please contact support and they will be happy to assist you.
💡Please Note: If card type cannot be determined at the time of processing, the system will default to no surcharge. This is handled automatically.
Card brands require specific compliant signage to be posted at all points of entry (front doors) and at all checkout counters before you begin surcharging. This is your responsibility, and we will not enable surcharging until you have confirmed your signage is posted.
⚠️Warning: The first violation for signage non-compliance is $1,000 fine from the card brand. The second violation is $5,000 and repeat violations can result in fines up to $25,000 or loss of ability to process payments for that card brand. There is no appeal process.
Prior to completing a transaction, the terminal must display the order total along with the surcharge percentage and surcharge amount that will be assessed if a credit card is used. The customer must be given the opportunity to see and acknowledge this before authorization. The terminal handles this automatically.
💡Important Note: Surcharge must also appear as a separate line item on all receipts and order forms, clearly labelled. The final total displayed must include the surcharge amount. This is all handled automatically by your ThriftCart P5 terminal.
Surcharging is disabled by default for all merchants. It can only be enabled by an onboarding agent. Once enabled, you can configure and turn on/off surcharging as needed.
Surcharging is configured on your Profile page in the Payment Portal. Once the toggle is enabled, the following configuration fields will be available and required, and your Onboarding agent will do the initial configuration:
|
Field |
Description |
Default |
Editable By |
|
Enable Surcharge |
Toggle to enable or disable surcharging for the store. |
Off |
Onboarder only (initial rollout) |
|
Surcharge Percentage |
The surcharge % to pass to the customer. Cannot exceed 3% (2% for CO/OK locations). |
— |
Onboarder / Merchant |
|
Surcharge Tax |
Whether to assess the surcharge on the tax amount as well. |
No |
Onboarder / Merchant |
|
Tax Surcharge |
Whether to apply taxes on the surcharge amount, based on state/local law. |
— |
Onboarder / Merchant |
💡Important Note: You should consult a tax professional before adjusting the Surcharge Tax or Tax Surcharge settings from the defaults. Onboarding agents should not offer tax configuration advice.
We will not enable surcharging until you have confirmed you have compliant signage posted at all entry points and checkout counters. We will review this with you in your Welcome Packet during onboarding.
When surcharging is made active for you, we will send you a ‘Get Started’ guide (the Surcharge Welcome Packet). The packet includes compliant signage examples, disclosure requirements, and setup guidance. Onboarding agents can resend the packet if needed.
A Quilt example of that packet can be found here. Quilt is the parent company of ThriftCart Payments, the packet you receive will be for ThriftCart.
The surcharge percentage represents the fee passed to the customer on eligible credit card transactions. Here are the configuration rules:
There are two independent tax configuration options. Surcharge Tax will be hidden by default and Tax Surcharge will be enabled by default only for states that require tax on surcharge. After activation, you will have control of these settings on your Payment Portal Profile page. These settings should not be changed without consulting a tax professional:
|
Setting |
Description |
|
Surcharge Tax |
Determines whether the surcharge percentage applies to the tax portion of the transaction. Editable by merchant but requires tax guidance. |
|
Tax Surcharge |
Determines whether the surcharged amount is also subject to sales tax. Controlled by a feature flag — default is No at launch. |
If enabled, Surcharge Tax allows you to include taxes amounts for transactions in the calculation for surcharge. This will be hidden by default and will only be enabled if we receive sufficient user demand.
It allows you to cover more of the transaction total with the surcharge, offsetting more of the total processing expense. There are some states where tax cannot be surcharged.
💡Please Note: Most other processors (Toast, Square, Lightspeed, etc) do not have this setting available.
Below is an example of how the transaction will change with this setting enabled:
Surcharge = (Transaction Subtotal x Surcharge Rate) + (Tax Total x Surcharge Rate)
|
Surcharge Tax? - Yes |
Example Data |
|
Item Subtotal |
$100.00 |
|
Tax (ex. 8.25%) |
$8.25 |
|
Surcharge (ex. 3%) |
$3.25 ($100 * 3%) + ($8.25 * 3%) |
|
Total |
$111.50 |
|
Surcharge Tax? - No |
Example Data |
|
Item Subtotal |
$100.00 |
|
Tax (ex. 8.25%) |
$8.25 |
|
Surcharge (ex. 3%) |
$3.00 ($100 * 3%) |
|
Total |
$111.25 |
Tax Surcharge will determine if the surcharge amount itself should be taxed or not. This is required by some States that consider surcharge to be taxable. If enabled, surcharge will be calculated first, and then tax applied to the total and surcharge. This means the tax will be increased after authorization.
Below is an example of how the transaction will change with this setting enabled.
Tax = (Transaction Subtotal x Tax Rate) + (Surcharge Amount x Tax Rate)
|
Tax Surcharge? - Yes |
|
|
Item Subtotal |
$100.00 |
|
Tax (ex. 8.25%) |
$8.50 ($100 * 8.25%) + (3.00 * 8.25%) |
|
Surcharge (ex. 3%) |
$3.00 ($100 * 3%) |
|
Total |
$111.50 |
|
Tax Surcharge? - No |
|
|
Item Subtotal |
$100.00 |
|
Tax (ex. 8.25%) |
$8.25 |
|
Surcharge (ex. 3%) |
$3.00 ($100 * 3%) |
|
Total |
$111.25 |
Below is an outline of how a surcharged transaction flows from card presentation through payout:
Surcharge must be returned on refunds proportionate to the amount being refunded:
Example partial refund calculation:
If the transaction total is $100 and the Surcharge was 3% ($3.00), on a Partial refund of $50:
Refund = $50 + ($50 × 0.03) = $51.50
The Surcharge must appear as a separate line item on all receipts, invoices, and order forms. The line must be clearly labelled as a surcharge. The final total displayed must include the surcharge amount. Displaying the surcharge percentage alongside the dollar amount is ideal for demonstrating compliance. Here is an example:
Surcharge follows the same billing format as Flat Rate. ThriftCart Payments charges you the standard default fixed flat rate plus a per-transaction fee for CP/CNP transactions.
Example fee comparison:
|
Scenario |
Transaction |
Payments Fee (2.89% + $0.10) |
Net Fee |
Your Take Home Amount |
|
Flat Rate (no surcharge) |
$100.00 |
($100 × 2.89%) + $0.10 |
$2.99 |
$100 - $2.99 = $97.01 |
|
Surcharge (3%) |
$103.00 ($100 + $3 surcharge) |
($103 × 2.89%) + $0.10 |
$3.08 |
$100 + $3.00 - $3.08 = $99.92 |
If you are enabled for surcharging you will see two new columns added to your Payout Report: Subtotal and Surcharge. A summary line at the top of the report also shows you the total surcharge amount passed on for the period.
How to read the report:
Exporting the Payout Report will also show which transactions were not surcharged and the reason why each was exempt. This is useful if you want to understand their ineligible transaction mix.
💡Please Note: The surcharge columns only appears if you are currently enabled for the Surcharge feature.
On the Payments page, the transaction amount displayed will reflect the full total including the surcharge. Clicking into an individual payment will open the Details panel, which includes two new fields specific to surcharging:
|
Field |
Description |
|
Amount Surcharged |
If the transaction was surcharged, this shows the dollar amount of the surcharge that was added to the total. |
|
Surcharge Exempt |
If the transaction was not surcharged, this field displays the reason why (e.g., debit card, card not present, exempt transaction type). This same reason code also appears on the Payout Report export. |
💡Please Note: The Surcharge Exempt reason code is particularly useful if you have questions about why certain transactions were not surcharged. You can contact Support at the phone number or email below if you need more details.
What is surcharging?
Surcharging allows you to pass credit card processing fees directly to the customer at the time of sale by adding a percentage-based fee to eligible credit card transactions. It does not apply to debit cards, prepaid cards, card not present transactions (phone orders or manually entered card numbers), or certain other exempt transaction types.
How is surcharging different from Cash Discount or Dual Pricing?
With Cash Discount and Dual Pricing, all shelf prices and labels must be updated to reflect the non-cash price, which is a significant operational lift for most stores. Surcharging requires no price changes, only compliant signage needs to be posted. The trade-off is that customers tend to view surcharges less favorably than a cash discount, since a surcharge is perceived as a penalty rather than an incentive.
Will surcharging fully cover the merchant’s processing fees?
Not always. Certain transactions are exempt from surcharging (debit cards, prepaid cards, CNP transactions, etc.), so depending on your card type mix, some processing costs will remain. You should understand that surcharging partially offsets processing costs, but likely does not eliminate them entirely. Cash Discounting and Dual Pricing are the only methods to fully cover processing costs.
Can surcharging be applied to debit cards?
No. Card brand rules prohibit surcharging on debit or prepaid cards. The PayFac determines the card type and automatically excludes ineligible cards. This includes if a debit card is “run as credit,” since it’s still actually a debit card, we cannot surcharge it.
Can you set your surcharge to any percentage?
No. The maximum surcharge is 3% in most supported states, some are lower. Merchants with any location in CO or OK are capped at 2%. Additionally, the surcharge should not exceed your actual effective processing rate.
Who is responsible for store signs informing about surcharges?
You are responsible for posting compliant signage at all points of entry and at each card-enabled checkout counter. This must be in place prior to enabling surcharging. We provide signage examples in the Surcharge Welcome Packet. Onboarding agents will confirm signage is in place before they can enable the feature.
What are the penalties for non-compliant surcharging?
If your signage is not fully posted or worded clearly, the first violation results in a $1,000 fine from the card brand. Repeat violations can result in fines up to $25,000 or you losing the ability to accept that card brand's payments entirely.
How does the surcharge show up on the Payout Report?
If you're enabled for surcharging you will see two new columns on your Payout Report: Subtotal and Surcharge. The formula is: Subtotal + Surcharge = Gross Amount, and Gross Amount – Fees – Refunds = Net Deposited. The exported report also includes a reason code for any transactions that were not surcharged, and a summary at the top of the report shows you your total passed-on surcharge for the period.
Why does a transaction on the Payments page show as 'Surcharge Exempt'?
If a transaction was not surcharged, the Details module on the Payments page will show a 'Surcharge Exempt' field explaining why. Common reasons include the card being a debit or prepaid card, a card-not-present transaction type, or another exempt category. The same reason code appears on the exported Payout Report. This is the best place to look if you need to know why a specific transaction did not include a surcharge.
I have a question, but I can't find my answer here. How do I get more assistance?
If you need immediate assistance, the ThriftCart team is available by phone or email. Feel free to contact our support team at 385-220-8892. You can also email us at support@thriftcart.com, and we will respond within 24 hours.