Kansas Credit Card Surcharge Laws

Quick Summary:

• Credit card surcharging is legal in Kansas as of January 1, 2025
• Merchants must provide clear and conspicuous notice at point of sale or entry
• Surcharges cannot exceed the merchant's actual processing costs
• Maximum surcharge rate is 4% under federal law
• Debit card surcharging remains illegal under federal regulations

Kansas underwent a significant transformation in its approach to credit card surcharging laws. Following a federal court ruling that declared the state's original 1986 anti-surcharge statute unconstitutional, Kansas legislators passed House Bill 2247 in 2024 to formally legalize surcharging with specific disclosure requirements. This change allows Kansas businesses to pass credit card processing costs directly to customers, provided they meet strict transparency standards.

The evolution reflects a broader national trend toward allowing merchants to offset rising payment processing costs while maintaining consumer protection through mandatory disclosure requirements. Kansas joins most other states in permitting surcharges, though with specific rules that businesses must follow to remain compliant.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Consult with an attorney before implementing surcharging programs, as rules can change and compliance requirements are complex.

Is Credit Card Surcharging Legal in Kansas?

Yes, credit card surcharging is legal in Kansas as of January 1, 2025, following the enactment of House Bill 2247. The law permits any person or retailer engaged in sales, service, or lease transactions to impose surcharges on credit card payments, but only with proper disclosure to customers.

Kansas previously prohibited credit card surcharges through a statute dating back to 1986. However, federal courts ruled in 2021 that this ban violated the First Amendment, effectively making it unenforceable. Rather than leave the situation in legal limbo, Kansas Governor Laura Kelly signed HB 2247 into law in 2024, providing clear guidelines for lawful surcharging practices.

The new law amends Kansas Statute 16a-2-403, which now requires businesses to disclose surcharge amounts through "clear and conspicuous notice to the customer at the point of entry or the point of sale and in advance of such transaction."

What's Allowed

Kansas businesses can implement surcharging under these conditions:

• Post clear notice at point of entry or point of sale before transactions
• Apply surcharges to credit cards only - excludes debit cards, cash, and checks
• Charge up to actual processing costs - cannot use surcharges to generate profit
• Display surcharge amounts clearly on receipts and transaction records
• Apply consistent rates across all credit card brands (per card network rules)
• Use surcharges for both in-person and online transactions with proper disclosure

What's Not Allowed

Kansas law and federal regulations prohibit these practices:

• Surcharging debit cards - illegal under federal Durbin Amendment provisions
• Exceeding actual processing costs - surcharges must reflect real merchant fees only
• Hidden or surprise fees - disclosure must occur before transaction completion
• Profiting from surcharges - fees can only recover processing costs, not generate additional revenue
• Inconsistent application - cannot vary surcharge rates between different credit card brands
• Inadequate disclosure - notices must be clear and conspicuous to customers

Penalty For Non-Compliance

While Kansas statute establishes the framework for lawful surcharging, enforcement typically occurs through multiple channels:

• Consumer complaints can be filed with the Kansas Attorney General's Consumer Protection Division
• Card network penalties may apply for violations of Visa, Mastercard, or other network rules
• Civil lawsuits under Kansas Consumer Protection Act for deceptive practices
• Local enforcement by district attorneys in counties like Johnson and Sedgwick

Consumers experiencing improper surcharging can contact the Kansas Attorney General's Consumer Protection Hotline at 1-800-432-2310 or file complaints online through the official complaint portal.

How Surcharging Laws in Kansas Have Changed Over Time

Kansas has experienced one of the more dramatic shifts in surcharging policy among U.S. states. The state's journey from prohibition to permission illustrates the complex interplay between state legislation, federal court decisions, and changing business needs.

1986-2021: Complete Prohibition Era Kansas originally enacted comprehensive anti-surcharging legislation in 1986 that completely banned merchants from adding fees to credit card transactions. This law allowed only cash discounts, creating the peculiar situation where businesses could advertise higher prices and discount them for cash payments, but couldn't advertise lower prices and add fees for credit cards.

2021: Federal Court Intervention The legal landscape changed dramatically when federal courts ruled in CardX, LLC v. Schmidt that Kansas's anti-surcharging statute violated the First Amendment. The court found that the state couldn't demonstrate that the ban served substantial state interests in lowering credit card debt or preventing consumer unfairness.

2024-2025: Legislative Response Rather than leaving businesses in legal uncertainty, Kansas legislators proactively passed House Bill 2247 in 2024. Governor Laura Kelly signed it into law with an effective date of January 1, 2025, providing clear guidelines for lawful surcharging practices.

This legislative response demonstrates Kansas's approach to balancing business interests with consumer protection through transparency requirements rather than outright prohibition.

Surcharging vs. Cash Discounts in Kansas

Kansas law historically distinguished between surcharges and cash discounts, a distinction that remains relevant today. Under the old system, businesses could offer cash discounts but not credit card surcharges, even though both practices result in identical customer pricing.

For example, a business could legally price an item at $104 and offer a 4% cash discount, bringing the cash price to $100. However, they couldn't price the item at $100 and add a 4% credit card surcharge. Both approaches result in cash customers paying $100 and credit card customers paying $104, but only the discount model was permitted.

The new law eliminates this artificial distinction while maintaining consumer protection through disclosure requirements. Businesses can now choose either approach:

• Surcharge model: Advertise base price, add clearly disclosed credit card fees
• Discount model: Advertise higher price, offer cash/debit discounts
• Dual pricing: Display separate cash and credit card prices side by side

This flexibility allows businesses to structure their pricing in ways that best serve their operational needs while ensuring customers understand exactly what they'll pay before completing transactions.

Kansas Credit Card Surcharge FAQs

Can Kansas gas stations charge different prices for cash and credit card payments?
Yes, Kansas gas stations can display dual pricing showing separate cash and credit prices, or they can show credit card prices and offer cash discounts. The key requirement is clear disclosure before customers begin fueling. Unlike some states, Kansas doesn't require specific signage formatting, but the pricing must be conspicuous and not misleading.

Do Kansas restaurants need to disclose surcharges on their menus?
While Kansas law requires "clear and conspicuous notice," it doesn't specify exactly where restaurants must display surcharge information. Best practices suggest including surcharge policies on menus, table tents, or entrance signage. Online ordering platforms must also clearly disclose surcharges before customers complete their orders.

Can Kansas contractors add credit card fees to invoice payments?
Yes, Kansas contractors can add surcharges to credit card payments for invoiced work, but they must disclose this policy before work begins or when presenting invoices for payment. The surcharge cannot exceed the contractor's actual credit card processing costs, typically 2-4% depending on their merchant agreement.

What happens if a Kansas business charges more than their actual processing costs?
Charging surcharges that exceed actual processing costs violates both Kansas law and card network rules. Customers can file complaints with the Kansas Attorney General's Consumer Protection Division, and card networks may impose penalties including fines or processing agreement termination. Businesses should document their processing costs to ensure compliance.

Are there different rules for online vs. in-person transactions in Kansas?
Kansas law applies the same disclosure requirements to both online and in-person transactions. For online sales, businesses must clearly display surcharge information before customers enter payment details. For in-person sales, disclosure can occur at the point of entry (like door signage) or point of sale (like register displays).