The Minnesota Legislature updated notification standards for credit card fees added to payments.
Cities have authority to charge “convenience fees” or “service charges” under the Minnesota Statutes, section 471.381, subdivision 2. Further, Minnesota Statutes, section 325G.051 allows cities to add a surcharge to transactions when the customer elects to use a credit card in lieu of cash or check. The surcharge is limited to 5% of the purchase price.
During the 2023 legislative session, a few changes were made related to how customers are notified of surcharges when making a payment. The changes are as follows:
- In person payments — inform the customer of the surcharge both orally at the time of sale and by a sign conspicuously posted on the premises.
- Website or mobile device payments — inform the customer of the surcharge by conspicuously posting a surcharge notice during the sale, at the point of sale, on the customer order summary, or on the checkout page of the website.
- Payments taken by phone — inform the customer of the surcharge orally.
Be sure to check any merchant agreements the city may have with credit card companies. The merchant agreement may not allow the city to pass on fees to the card holder.
It is important that any policies adopted by the city are consistent with the law and any merchant agreements in place.