Before we get started, I’m going to be honest, this one is pretty confusing. There is only a fine line to separate a Surcharge and a Convenience Fee and often they mistakenly get used interchangeably. To add to the confusion, in recent years the Florida Statute has been called into question and has been ruled unconstitutional by the Eleventh Circuit.
Let’s first start with definitions, according to the State of Florida, a Surcharge is any additional amount imposed at the time of sale (or lease) by the seller that increases the charge to the buyer for the privilege of using a credit card to make the payment. A Convenience Fee is charged in addition to the original transaction amount for the convenience of being able to use an alternate payment method. An example would be a movie theater that usually sells tickets at the box office in person but also offers ticket sales over the phone, which would require you to pay by credit card. The convenience fee would be charged for the convenience of making the purchase over the phone, not necessarily for the sole reason of using a credit card.
According to the Florida Attorney General, when you use a credit card to pay for goods or services, the merchant is charged a fee by the credit card company. Some merchants may choose to recoup those fees by adding a surcharge to your purchase. You can view this as charge that covers the merchant’s cost associated with the transaction.
If a surcharge is to be added, it must be disclosed BEFORE the purchase is made.
Now, Florida Statute 501.0117 prohibits Sellers for adding a surcharge for buyers choosing to use a credit card instead of cash, check or similar means so long as the seller accepts payment by credit cards. This however does not apply to discounts made to incentivize people to use other methods like cash or check if the discount is offered to all prospective customers. Think about filling up your car at the gas station, you often see two different prices per gallon with a discount given to cash buyers. Are you confused yet? If you are, you’re not alone.
In 2015 a lawsuit was brought on the issue of permitting surcharges and argued on whether there was a violation of freedom of speech, or whether it was an issue of conduct. The court analogized the statute to a law that prohibits serving a glass half-empty but permits to serve a glass half-full and ultimately found that it was a matter of a violation of speech and that the conduct was already governed by the Florida Deceptive and Unfair Trade Practices Act.
So where does this leave us? The Florida Law is still in the books, however it is unenforceable. This doesn’t mean you’re off the hook. It’s important to remember that the action of adding charges when selling a vehicle is still covered under FDUPTA and prohibits adding unlawful fees to the disclosed price of a vehicle or increasing the price of a vehicle after an agreement was reached with the buyer. You must always disclose the surcharge before the purchase is made!