Kansas merchants can legally add surcharge to credit card transactions

WICHITA, Kan. (KWCH) - The Sedgwick County District Attorney’s Office issued an alert to residents to be aware of a recent change in Kansas law that could affect their daily spending habits.

As of January 1, the Consumer Protection Division of the Sedgwick County DA’s Office advised that merchants in the state can legally add a surcharge to credit card transactions, “as long as clear notice is provided to the customer before the sale.”

The DA’s office explained that a state law was amended “to allow any person or retailer offering sales, services or lease transactions to impose a surcharge on credit card payments, as long as the amount of the surcharge is disclosed through a ‘clear and conspicuous notice to the customer at the point of entry or the point of sale and in advance of such transaction.’”

“Before this change in the law, Kansas had what amounted to a ban on surcharges, allowing only for cash discounts on sales. In 2021, however, the ban was held to be unconstitutional in a federal case, finding it was a violation of the First Amendment,” the DA’s office said.

Wichita business owner and entrepreneur Derek Sorrells, whose ventures include ownership of The Arcade, Just a Sip and Papa’s General Store said the added charge could help his business in the long run.

“Not without credit cards, but with debit cards too, we are usually charged 3.5%. So on every $100, we’re losing $3.05,” Sorrells said. “And over the course of the year, it adds up to a significant amount of money.”

While debit cards aren’t mentioned in the body of the new state statute, adding a debit card surcharge remains illegal in all 50 states under federal law.

“Similarly, because Kansas state law has no maximum surcharge, the maximum allowed in Kansas is capped by federal law at 4%,” the DA explained.

Sorrells said he has “a lot of credit card customers and it’s the majority of the payment nowadays.”

Derek Burrows, owner of his store called The Burrow for more than 13 years, said there can be downsides when customers use a credit card, including the cashback option.

“The cashback comes from the store you bought it from. It’s not the credit card company giving up a percent,” he explained. “It’d be nice if fees were lower. If a store needs to raise prices to cover that, I’m sure they will.”

Sorrells and Burrows emphasized their focus on making sure that their customers want to come back.

“First off, I don’t want to add a charge to my customers,” Burrows said. “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.”

Sorrells said businesses’ response to the surcharge change likely will be mixed.

“I think more businesses now that they can do it, will absolutely do it. But I think you’re also going to see many businesses try to stay away from it,” he said. “One of the things as small business owners, what we’re trying to do is try to get more customers and keep those customers, so I think you’ll see a lot of people steer clear of that.”

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