Great question! Yes, this is actually legal. Sellers in the U.S. can add a surcharge to a customer's sale when a credit card is used.

This article has more info on the matter: https://squareup.com/help/us/en/article/5671-can-i-apply-a-surcharge-to-square-sales

Thanks for the reply.

For the section "Enter the name of the company that provides your company with card payor services." on the notification forms,

does that mean Square Inc?  Where do I find your merchant ID?

Also, is there a disclosure form for American Express? I have found the other 3 in the post you referenced. 

Also, does it make a difference that we are a medical practice? Our office received a phone call, a soliciting call to be fair, about recent changes in the Dodd-Frank act for medical practices using credit cards and how we could be being overcharge in terms of fees per transaction. I have recommended that our employer speak with her accountant about these issues, but I figured I would also ask here to see what you had to say. 

We are primaryily taking payments for insurance co-payments and self-paying clients, if that makes a difference as well. 

Thanks for any and all help you may provide.

Thanks for circling back on this. I'll see if there is any other information or resources that may bring more clarity. Appreciate your patience in the meantime.

Simple way is to just raise your price by 2.7% across the board. If you charge $25 an hour, start charging $25.50 or $26. Now you don't have to worry about a surcharge. You could then even give a small discount for cash. Problem solved.

@perkits, We are thinking that is the way to go (to raise prices and then give a cash/check discount), but it is difficult where insurance companies are concerned. If we raise prices all around then the patient's copay/coinsurance goes up and I do not think we can give a cash/check discount on that legally so we're right back where we started. Its a non-issue with self-pay patients though.  

@Tom, thanks for looking into things and keeping me posted. I appreciate it.

I can also update with whatever our accountant comes back with incase others are in a similar situation. 

Hey @Coun_Associates,

Update: I took a closer look into your questions and I was able to pull up some more details.

For the section "Enter the name of the company that provides your company with card payor services." on the notification forms, does that mean Square Inc?  Where do I find your merchant ID?

• Yes, you can enter in Square as the payor service. We are a credit card processing company but we don’t supply our account holders with individual merchant ID numbers. Although we don’t assign specific numbers, your business is still designated as a merchant with Square, and your Square merchant account is associated with your email address.

Also, is there a disclosure form for American Express? I have found the other 3 in the post you referenced.

• No, there is no disclosure for American Express at this time. They allow surcharge fees as long as all card networks get the fee, which is now the case. Currently, you only need to register with Discover, MasterCard, and Visa.

Also, does it make a difference that we are a medical practice? Our office received a phone call, a soliciting call to be fair, about recent changes in the Dodd-Frank act for medical practices using credit cards and how we could be being overcharge in terms of fees per transaction. I have recommended that our employer speak with her accountant about these issues, but I figured I would also ask here to see what you had to say. 
 
We are primarily taking payments for insurance co-payments and self-paying clients, if that makes a difference as well. 

• Your merchant category code or business type does not matter as surcharging exists to help the seller pay for the expense of accepting credit cards. The main thing that you'll need to keep in mind as far as overcharging, is that the amount cannot be over 4% of the transaction. Debit card surcharge rules may vary by state, regulatory or card network rules. Please touch base with tax professional or your local government for further guidance on if surcharges are permitted in your area.

Additional Resources:

• Surcharging Credit Cards – Q&A for Merchants — This guide is a bit old, but still available on Visa's website. 

• Can I Apply a Surcharge to Square Sales? — This article in our Support Center covers a bit more on calculating surcharge fees.

Hopefully this information helps make things more clear. Please don't hesitate to reach out if anything else comes up.

And while Square does charge a fee for debit cards, the credit cards companies prohibit it so you'll have to make sure you don't do so. Also, make sure you read and follow Visa's detailed disclosure rules about signage required -and- list any surcharge as separate item which is required.

I appreciate your reply. When it comes to disclosure, I've read on Visa's website that the client just has to be clearly informed. It also says to put that we charged a surcharge on the receipt. Do you have any idea how I can do that via square? 

Thanks!

Hi @Coun_Associates. I'd suggest that you create an item called "Surcharge" and add it to each sale. This will insure it clearly appears on the receipt. 

Is it possible to set a percentage through creating a new item? I can only see where I am able to add a set price and SKU. 

Hey @Coun_Associates if you're interested in surcharging based more percentages I would recomend @VanKalkerFarms approach. 

You can create a tax named surcharge with the appropriate percentage. Then be displayed on the receipt, so it's visible to your customer. 

If you have any questions please let me know! 😀

with this method the receipt just says "tax" but doesn't say "surcharge". What am i doing wrong? how do i get it to say surcharge?

I have an in home healthcare practice and I accept my payments with square. I am having trouble with how to charge a card on file that includes the 3.5%+.15 but then recouping my actual fee after that is added. I am consistently coming in under my actual prices. For instance if I am charging $100 how do I calculate what to add to actually be credited my original fee??

Square is not answering this specific part of my question and is telling me to get a surcharge calculator?  

Any help with this would be greatly appreciated. 

Absorb the $3.65. You are still making $96.35. It's a convenience for your customer, and just the cost of doing business. Or go to a cash/check only payment. We pay thousands in fees and make it up on volume. 

Here is a copy paste from another one of my posts.

It is because you are taking 3.5% of the additional $3.65 also, so you have to take into account for that too. 

$3.50 for CC charge

$.15 for swipe on manual

$.13 for the CC charge on the $3.50

so take your total you want to net. Times it by 1.0363 and add $.15. Your net after fees should be what you want. 

Example

If manually entering a $100 sale

use 3.63% + $.15

100*1.0363=103.63

103.63+.15=103.78

charge 103.78 and your fee from square will be $3.63 + $.15 netting $100

Example

If swiping the card for a $100 sale

use 2.83%

$100*1.0283=$102.83

Charge $102.83 and your fee from square will be $2.83 netting $100

Hey @JSL, sorry for the frustration this is causing. Have you tried setting up the surcharge as an item or tax as mentioned earlier in this thread? If you set it up as an item you can add it to an open ticket with out disrupting other dining options settings.