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Is credit card surcharging legal in California?

Usually yes, with conditions. California allows a credit card surcharge but attaches rules you have to meet. California's no-surcharge statute, Civil Code § 1748.1(a), is still printed in the code, but the Ninth Circuit held it unconstitutional as applied in Italian Colors Restaurant v. Becerra (878 F.3d 1165, 2018) and its enforcement was permanently enjoined. Separately, California's Honest Pricing Law (SB 478) requires advertised prices to include mandatory fees. The Attorney General's guidance says a credit card fee is generally not "mandatory" — and so need not be baked into the advertised price — when the customer can avoid it by paying another way; if you accept only credit cards, the fee becomes mandatory and must be in the posted price.

The statute

Citation: Cal. Civ. Code § 1748.1(a); California Honest Pricing Law (2023 S.B. 478)

“No retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means.”

Cal. Civ. Code § 1748.1(a); California Honest Pricing Law (2023 S.B. 478)

How much you can charge

No state cap. The binding limits are the card networks: Visa caps a credit card surcharge at the lower of your merchant discount rate or 3% (reduced from 4% effective 15 April 2023) and Mastercard caps it at 4%. Surcharging debit cards is prohibited nationwide.

Disclosure requirements

Because of SB 478, always offer at least one non-surcharged way to pay (debit or ACH) and make the surcharge visibly avoidable. A card-only store must fold the fee into its listed prices instead of adding it at checkout.

Not legal advice

This page is a research summary for merchants, not legal advice, and no attorney-client relationship is created by reading it. Surcharge rules change, they interact with card-network rules and federal law, and they can turn on facts specific to your business. Consult licensed counsel in California before you implement or change a surcharge.

Putting this into practice on Shopify

Rules like these only help if your checkout can actually enforce them, including on Shop Pay, Apple Pay and Google Pay.

Shopify surcharge guideSee FeeLayer