Passing Credit Card Fees at Dental Practices: An Updated Guide

 

Passing credit card processing fees on to patients, otherwise known as surcharging, has become a more frequent consideration for dental practices grappling with rising operational costs. Yet it’s not one-size-fits-all.

Office managers need to understand the legal, contractual, ethical, and practical dimensions before implementing any surcharge or similar program.

What Is Surcharging and Related Programs?

There are nuances between the various discount programs that office managers tend to be offered. The first is surcharging, which is adding a fee to a patient’s bill, specifically when they pay using a credit card. Note that debit cards are not allowed to be surcharged.

A variation of this is known as cash discounting or dual pricing: showing a regular price that applies if paying by cash, and charging more if a patient is paying with credit. Depending on how disclosure is handled, this may be functionally similar to a surcharge—but rules often treat them differently.

To help dental managers understand the differences, we created this short video explaining it.

Surcharger Beware

There are many risks to surcharging, beginning with the legal implications. State laws vary greatly. In some states surcharging is banned; in others, restricted. Non-compliance can lead to fines or legal exposure.

As of 2025, surcharging is illegal in certain states, including Connecticut, Maine, Massachusetts, and California. Some states allow surcharging but with caps or other restrictions. For example, Colorado limits surcharges to 2%.

Beyond state rules, there are also card-brand and network protocols to follow. Visa, Mastercard, and the other card networks require specific disclosures, timing, caps, and procedural compliances. Violations can lead to penalties, or losing the right to accept certain cards.

Visa’s maximum surcharge cap is 3%. Dental offices must notify their acquirer at least 30 days before beginning a surcharge program, the surcharge must be disclosed separately on receipts, and signage notifying patients of the options are to be posted at the point of sale and entrance.

Mastercard allows for 4%. Similar requirements for disclosure, notification, and separate receipt itemization are required. The surcharge must not exceed what the merchant actually incurs (or other caps, depending on the card brand and state).

Of course, some insurance providers do not allow for surcharging in their payer contracts. Some contracts may expressly forbid extra charges, or limit how services are billed. Adding surcharges might violate those contracts.

Also to consider: If a practice has multiple locations in different states, each location must comply with its own state’s laws. You can’t apply a statewide policy uniformly if state law bans surcharging locally. Surcharge amounts must be tracked, reported correctly (e.g. for IRS, 1099-K). Practices are also required to have their payment systems ready to handle this properly.

Then there’s the crucial matter of optics and transparency with patients. At AADOM 2025’s Practice Makes Profits seminar, the idea of surcharging was met with plenty of warranted pushback. “I don’t know if any of you guys are doing this but it just doesn’t give me a good feeling,” panelist Candy Miller noted. “This is a cost of doing business and you should raise your fees accordingly.”

One attendee related that she flat-out pushed back on fee passing when her doctor brought it up, while another shared how they turned this billing trend into a strategic marketing point. Merchant Advocate’s dedicated AADOM representative, Cheryl McKenna even floated the idea of advertising the fact that you don’t surcharge on your website and by your credit card terminal, suggesting messaging like, “Because we value our patients, we do not charge an extra fee if you use your credit card for payment.”

“This can mean the difference between their dental practice and someone else’s to see the message, ‘We do not charge our patients an additional fee to use credit cards!’,” she added.

Still Choose to Pass Fees? Some Practical Considerations

For starters, ensure your payment processing system can differentiate between credit vs. debit, properly apply the surcharge only to the allowed transactions, and generate compliant receipts. Many dental-industry POS systems may not support all of this out of the box.

Train staff carefully: So they know when surcharges apply, how to explain them to patients, and ensure the disclosures are visibly posted. Be upfront with your patients, ideally before the appointment (billing paperwork, signage, website), not just at checkout. Unexpected fees can erode trust.

Surcharging offers dental practices a possible mechanism to relieve pressure from rising payment processing costs—but it comes with legal, contractual, perceptual, and operational risks. In 2025, with new laws (especially in some states) and updated card-network rules, the stakes are higher for getting it right. For many practices, the better approach may be transparency, cost management, negotiation with processors, and exploring alternative payment options rather than shifting costs onto patients.

The good news is, practice managers can take on consultants such as Merchant Advocate, who can help alleviate some of your processing costs WITHOUT switching processors. Find out what we can do with a free, no-risk analysis at merchantadvocate.com/aadom.