Running a dealership means managing thin margins, rising operating costs, and complex vendor relationships. For many dealers, a compliant surcharge program offers a smart way to recover credit card processing fees without raising prices. But there’s a catch: non-compliance can cost you more than the fees ever did.
Visa and Mastercard enforce strict national rules for surcharging, and failing to follow them isn’t just a technicality. It can result in chargebacks, fines, or even being shut down by your payment processor.
So how can you make sure your dealership’s surcharge program is actually compliant? Let’s break it down step by step.
The $25,000 Mistake: Why Compliance Matters
A common assumption among dealerships is that if the terminal adds a fee and it “looks” right, it must be compliant. Unfortunately, this isn’t the case.
Visa and Mastercard have clearly defined rules around:
- Signage at the point of entry and point of sale
- Itemized receipts showing the surcharge separately
- Limits on surcharge amounts (maximum 2.4% in Canada)
- Surcharge only applying to credit, not debit or prepaid cards
Failure to comply can result in:
- Immediate chargebacks from customers who weren’t properly notified
- Fines from card brands or acquirers
- Termination of your merchant account or processor relationship
A non-compliant setup isn’t just risky – it’s a liability hiding in plain sight.
What Compliance Actually Looks Like
Most dealerships don’t have time to interpret legal jargon or comb through Visa’s policy documentation. That’s why it’s critical to work with providers who simplify compliance and handle the legwork for you.
Here’s what a fully compliant surcharge program looks like:
- Clear Signage
- A sign must be posted at the entrance and point of sale.
- The language must clearly disclose that a surcharge applies to credit card transactions.
- Signage must be visible before the customer initiates payment.
- Separate Line Item on Receipts
- The surcharge must appear as a separate line item.
- It must indicate the exact fee and only apply to credit cards.
- No bundling or vague wording (e.g. “service fee”) is allowed.
- Technology Setup
- Your payment terminal must detect card type (credit vs. debit).
- It must automatically apply the surcharge only to eligible cards.
- The system must prevent surcharge applications to debit or prepaid cards.
- Customer Communication
- Staff must be able to explain the surcharge clearly.
- Customers should be offered the choice to use another method (e.g. debit or cash).
- Consistent Staff Training
- Ensure your team is trained regularly on how to communicate the surcharge.
- Roleplay conversations to build confidence in explaining the program.
- Proactive Internal Review
- Do internal audits of your signage, receipts, and terminal setup.
- Address changes quickly to avoid slipping into non-compliance.
This setup isn’t just about checking boxes – it’s about protecting your dealership.
DIY or Legacy Solutions: The Hidden Risks
Some dealerships use a legacy terminal setup or add a flat fee manually. Others rely on POS systems that aren’t equipped for automatic surcharge detection. These setups might function day-to-day, but they leave your business open to chargebacks and audits.
Common non-compliant mistakes include:
- Applying surcharges to all cards (including debit)
- No signage at entry or terminal
- Fees listed as “miscellaneous” or bundled with product pricing
- Manual fee entry by staff without system logic
Even worse, some DIY setups don’t account for updates in policy. What worked two years ago might already be out of date.
If Visa or your processor sent a mystery shopper tomorrow, would you pass?
Audit Readiness: Could You Pass a Mystery Shopper Test?
Card brands occasionally use mystery shoppers to ensure merchants are following surcharge rules. If your signage isn’t visible, receipts aren’t itemized properly, or your terminal allows fees on debit-you could fail on the spot.
Questions to ask yourself:
- Would a first-time customer understand there’s a surcharge before paying?
- Can your team explain the surcharge confidently and accurately?
- Do your receipts clearly show the correct fee?
- Is your system preventing accidental fees on debit cards?
- Are your signs still up, legible, and placed where they need to be?
- Have you reviewed your program in the last six months?
If you hesitated on any of these, it’s worth reviewing your setup.
How Rescue Ensures Full Compliance
At Rescue, we build surcharge programs specifically for dealerships, with a focus on full compliance from day one. That starts with clear, brand-approved signage kits, which are shipped directly to your location and designed to meet visibility requirements at both the point of entry and point of sale. Our terminals are pre-configured to detect card types in real time, applying the surcharge only where it’s allowed—and never on debit.
We also go beyond setup. We provide training so your staff can explain surcharges confidently, and our receipts are itemized to meet brand standards. But most importantly, we stay involved. Rescue is your partner at every stage, if regulations shift or requirements change, we make sure you stay compliant and protected.
With Rescue, you don’t just get tools. You get a partner who’s invested in protecting your margins and your reputation.
Final Thoughts: Compliance Is a Margin Protector
Pass the Fee is a powerful tool for protecting profitability, but only when done right. A non-compliant setup can undermine your customer trust, cause legal risk, and undo everything you were trying to protect.
Think of compliance as insurance: it’s there to protect your revenue, your brand, and your ability to keep operating without surprise costs.
If you’re unsure about your current setup, or you’re exploring surcharge for the first time, let’s talk. We’ll help you pass the mystery shopper test – before they ever walk through your doors.
Explore more surcharge compliance tips at rescuepayments.com
