Minnesota law requires the seller to inform the purchaser of the surcharge at the time of the sale and also have a sign that’s conspicuously posted on the premises. Surcharges must not exceed 5% of the purchase price (although federal law limits surcharges to 4%, and most card networks limit surcharges to 3%).
Failure to comply with these rules can result in civil penalties of $500 per violation and require a refund to each buyer.
Minnesota Governor Tim Walz signed a new bill, HF 3438, updating Minnesota’s Deceptive Trade Practices Act. This new law makes it illegal to add service fees, health and wellness surcharges, and other mandatory charges to a customer at the end of a transaction. Restaurants and hotels will still have the option to charge mandatory gratuity if the revenue goes directly to employees, as long as the percentage is clearly disclosed alongside of the pricing. Violations here can result in fines of $25,000 per violation.
There are certain exceptions for the new law for purchases related to real estate, motor vehicles, and utilities.
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