Restaurants, retailers press lawmakers to allow credit-card surcharges, cite high swipe fees and diverging state guidance
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Summary
The Massachusetts Restaurant Association and retailers told the committee that rising credit-card processing fees are a major cost driver and asked the legislature to permit surcharges (with disclosure) that would allow businesses to pass merchant fees to card users.
Restaurant and retail representatives told the Joint Committee on Community Development and Small Business that credit-card processing fees have become a significant cost pressure and urged statutory change to allow surcharges with clear consumer disclosure.
Jessica Moore, director of government affairs for the Massachusetts Restaurant Association, said credit-card fees have climbed and are now one of the largest operating costs for many restaurants. "Restaurant owners pay between 2% and 5% on every credit card transaction, which includes the tax and the tip," Moore said, and estimated that the added cost can equal $20,000 to $50,000 a year for an average small restaurant.
Moore described confusion in the marketplace following a Division of Banks opinion letter that staff and businesses interpret differently than the current statutory prohibition on surcharging. "There is an opinion letter by the Division of Banks that says under certain circumstances you can do this. And then we have the law that says no, you can't," she told the committee. Moore said the association supports a carefully drafted law that would allow surcharges capped at the actual processing cost and require clear disclosure to consumers.
Retailers' trade groups echoed the concerns. Bill Rennie of the Retailers Association of Massachusetts said the organization supports legislative change and pointed to state examples where the government itself permits a processing surcharge for tax payments to illustrate that a transparent surcharge is feasible.
Some members raised consumer‑protection questions about whether surcharging would result in double charging for customers already paying credit-card convenience costs or whether merchants would simply raise prices. Moore and Rennie replied that clear disclosure and statutory limits on surcharge amounts could prevent abuse and that many merchants already use cash discounts or price structures to reflect payment method differences.
The committee did not take action during the hearing but asked witnesses to provide draft statutory language and to clarify how disclosure and consumer protections might be enforced.
