“Can I just pass the credit card fee to the customer?” is one of the most common questions café owners ask once they see their monthly processing statement. The short answer is yes, mostly—Canadian merchants have been allowed to surcharge credit card payments since late 2022, and most US states allow it too. But the rules are specific, the cap is lower than people assume, and there are hard exclusions (debit, prepaid, and all of Quebec). This guide lays out exactly what is and isn’t allowed, then asks the more useful question: is surcharging actually the best way to deal with card fees at a café, or is there a bigger lever?
This is general information for café and restaurant operators, not legal or financial advice—confirm the current rules for your specific province, state, and processor before you change anything.
The short version
In Canada, after a class-action settlement, Visa and Mastercard changed their rules effective October 6, 2022 to let merchants surcharge credit card transactions. The core constraints:
- Maximum surcharge: the lesser of your cost of acceptance or 2.4%. You can never surcharge more than what the card actually costs you, and never more than 2.4% regardless.
- Credit only. You may surcharge Visa and Mastercard credit cards. You may not surcharge debit, prepaid cards, or Interac.
- 30 days’ notice. You must notify Visa and/or Mastercard at least 30 days before you start surcharging.
- Clear disclosure. The surcharge must be disclosed at the point of entry (your door), the point of sale, and on the receipt.
- No surcharge on refunds. If you refund a surcharged sale, you must refund the surcharge too.
- Quebec is excluded. Under Quebec’s consumer protection law you cannot surcharge sales made in Quebec—including online orders to Quebec customers—even if your business is based elsewhere.
In the US, surcharging is allowed in most states under the same network settlement framework, but several states restrict or ban it and the details (caps, disclosure) vary by jurisdiction. The constants everywhere: credit only, clear disclosure, and you can’t surcharge above your cost.
What a surcharge actually nets you
Surcharging recovers a slice of your processing fee, but it is a thin slice. Here’s the math on typical café tickets at the 2.4% cap:
| Ticket | 2.4% surcharge | What it recovers |
|---|---|---|
| $5.00 latte | $0.12 | ~12 cents per drink |
| $14.00 lunch | $0.34 | ~34 cents per order |
| $45.00 group order | $1.08 | ~$1.08 per order |
On a café’s bread-and-butter $5 drink, you are clawing back about twelve cents while adding a line item the customer sees every single time. That is the tension: the recovery is real but modest, and the cost is goodwill with the regulars who are your most valuable customers. For context on why repeat customers matter so much, see customer lifetime value for coffee shops—a surcharge that nudges a regular toward “this place nickel-and-dimes me” can quietly cost more than it recovers.
How to add a surcharge correctly (if you decide to)
If you’ve weighed it and want to proceed in Canada, do it by the book:
- Confirm your real cost of acceptance. Check your processor statement for your effective rate. You can only surcharge up to that number, capped at 2.4%.
- Notify the card networks 30 days ahead. Visa and Mastercard both require advance notice before you begin surcharging.
- Configure it credit-only. Make sure your POS applies the surcharge to Visa and Mastercard credit only—never debit, Interac, or prepaid.
- Disclose it everywhere. A sign at the entrance, a notice at the till and on your online ordering checkout, and a separate line on the receipt.
- Exclude Quebec sales. If you serve or ship to Quebec, those transactions cannot carry a surcharge.
- Handle refunds correctly. Refund the surcharge whenever you refund the sale.
Note that Square does not have a built-in automatic credit-card surcharging feature in the same one-click way some processors do—operators typically handle it as a configured service fee with care, or reconsider the approach entirely. If your goal is simply “my fees feel too high,” it’s worth understanding where those fees come from first; our breakdown of Square fees for restaurants shows exactly what you’re paying and why.
The bigger lever most cafés miss
Here’s the reframe. A surcharge fights over 2–3% of card fees at the counter. But for most cafés, the largest payment-related cost isn’t the card swipe at all—it’s the 15–30% commission that delivery marketplaces take on every online order. Recovering 2.4% at the till while handing 25% to a marketplace on your online orders is straining at a gnat.
The higher-leverage move is to shrink the big fee, not the small one:
- Move online orders to commission-free channels you own. Your Square Online site, a branded app, or a flat-fee platform all replace 15–30% commission with roughly 3% processing. The full menu of options is in how to take online orders without commission.
- Compare the real all-in cost of the marketplaces so you know what you’re actually paying. Our analysis of DoorDash and Uber Eats fees adds up commission, delivery, and marketing fees that the headline rate hides.
A worked comparison makes the point. A café doing $8,800/month in online sales:
- A 25% marketplace commission costs about $2,200/month.
- The same sales on a commission-free channel at ~3% processing cost about $366/month.
That’s roughly $1,834/month recovered—on online orders alone—versus the few dollars a day a counter surcharge claws back. The surcharge isn’t wrong; it’s just small. If you only have the appetite to change one thing, change the big number.
So—should your café surcharge?
A reasonable default for an independent café:
- Probably skip surcharging on in-person drink sales. The recovery is pennies and the friction lands on your most loyal customers.
- Consider it for large or catering orders, where the dollar amounts make the 2.4% meaningful and customers expect a more formal transaction. Our guide to accepting pre-orders and catering on Square covers that order type.
- Prioritize the commission fight. Whatever you decide about surcharging, the bigger savings live in owning your online ordering channel rather than renting it from a marketplace.
If owning that channel is where you land, a branded order-ahead app on your existing Square POS is one clean way to do it—Tany builds white-label iOS and Android apps with web ordering, self-running loyalty, and push, live in about a day for $99 CAD/month per location at 0% commission. It’s one option among several; the principle is what matters: chase the 25% before you chase the 2%.
Sources
- Merchant surcharges, service and convenience fees — Government of Canada (FCAC)
- Merchant Surcharge Rules & Fees — Mastercard Canada
- Surcharging FAQ for Businesses — Visa Canada (PDF)
- Surcharging in Canada: What you need to know — CFIB
- Credit Card Surcharges in Canada: A Legal Guide — eBizCharge
- Learn about Square fees — Square Support (Canada)