Dual Pricing vs. Surcharging: A Compliant Way to Offset Card Fees
Every time a client pays by card, the processor takes a cut. On a $2,000 invoice, that is about $60 gone. Do that a few times a month and you are handing over hundreds of dollars a year in fees you never see.
There is a legal way to offset that cost. It is called dual pricing, and it is broadly legal in all 50 states when you do it correctly. But it is easy to confuse with surcharging, which the card networks regulate and some states ban. The two follow very different rules, so the difference is worth getting right.
This guide explains what dual pricing is, how it differs from a surcharge, why it is legal, and how to do it the right way.
What is dual pricing?
Dual pricing means you show two prices for the same item: a card price and a lower price for other payment methods. The card price is your posted price. Clients who pay by cash, check, or bank transfer get the lower price.
The lower price is a discount. It is not a penalty on card users. You are rewarding the client for paying by a method that costs you less to accept.
People also call this a cash discount. The idea is the same: one posted price, and a discount for the cheaper payment method.
Dual pricing vs. surcharging: the key difference
These two models look similar from across the room, but they are built in opposite directions. That difference is what makes one broadly legal and the other tightly controlled.
- A surcharge is a fee added on top of a card payment. You start with one price, then add a percentage when the client uses a credit card. Surcharging is regulated by the card networks and banned in several states. It also requires network registration, a fee cap, and exact card-type detection.
- Dual pricing is a discount off the posted price. The card price is the real price. Cash, check, and bank transfer get a reduction. No fee is ever added on top of a card payment. This is broadly legal in all 50 states when done correctly.
The short version: a surcharge adds a fee, dual pricing gives a discount. Same end numbers, very different rules.
A real example
Say you want to take home $2,000 for the work.
You turn on dual pricing with a 3% adjustment. Now the invoice shows two prices:
- Card price: $2,060. This is your posted price.
- Cash, check, or bank transfer: $2,000. This is the lower price.
If the client pays by card, the processor takes about $60 in fees, and you take home about $2,000. If the client pays by bank transfer, check, or cash, they pay $2,000 and you keep almost all of it. Either way, you take home about $2,000. The card fee no longer comes out of your pocket.
Is dual pricing legal?
Yes. Dual pricing is legal in all 50 states when you do it correctly.
Federal law is on your side here. The Durbin Amendment protects a merchant's right to offer a discount for cash, check, or another lower-cost payment method. A discount for a cheaper payment method has always been allowed. That is the exact structure dual pricing uses.
Surcharging carries the heavier compliance load, because it adds a fee to a card payment. Dual pricing is a discount, not a fee, so the surcharge rules do not apply to it.
How to do dual pricing the right way
The model is legal, but you still have to run it correctly. Follow these rules:
- Post the card price as your price. Use the card price on your quotes, ads, and website. Do not advertise the lower price as your standard price.
- Show both prices before the client pays. The client must be able to see the card price and the lower price and choose between them.
- Frame the lower price as a discount. It is a reduction for cash, check, or bank transfer. It is not a fee added to a card.
- Check your state rules. A few states, such as New York, Maine, and Connecticut, have specific signage or disclosure rules. Confirm what applies where you operate.
- Keep the rate reasonable. A small adjustment that roughly matches the card fee is enough. Do not use dual pricing to mark up the work.
Rules vary by location and business type. This guide is a starting point, not legal advice. Confirm the requirements for your area before you turn it on.
How SettleDue handles dual pricing
SettleDue builds dual pricing into your invoices and estimates so you do not have to manage two price lists by hand.
- You enter one amount. Type in the amount you want to take home. That is the cash, check, and bank transfer price.
- SettleDue calculates the card price. You set the adjustment once, up to 3%. Every invoice shows the card price as your posted price and the lower price below it.
- Your client chooses how to pay. On the payment page, the client sees both prices. Card pays the card price. Bank transfer gets the lower price. Cash and check are paid to you directly at the lower price.
- Your reports stay clean. Your revenue matches your take-home amount. The card price reflects the higher cost of accepting cards.
You stay the merchant of record on every payment, and the payment page is hosted by Stripe, so SettleDue never sees card numbers. For the full setup steps, see the online payments guide.
Keep more of what you earn
Card fees are a real cost, but they do not have to be your cost. Dual pricing lets you offer the convenience of card payments while protecting the price of your work. Done right, it is legal everywhere and simple to run.
SettleDue makes it automatic for freelancers, contractors, and trades. Set your amount, set your adjustment, and send the invoice.
No credit card required. Cancel anytime.