Non Cash Adjustment

What is a Non Cash Adjustment?

A non cash adjustment is a line item that appears on a credit or debit card receipt that indicates that a customer was not given a discount for paying in cash. However, in practice, it also effectively adds a fee for paying with a credit or debit card which can be considered a “Surcharge”.

Non Cash Adjustments, Cash Discount, and Surcharges

There is a very fine line for what is considered to be a “Cash Discount” versus what is considered to be a “Surcharge” and most of it is semantic. Businesses must follow very specific guidelines when implementing checkout fees or could be subject to significant penalties for violating card brand rules and in some cases, legal action may be taken against the business for violating state Surcharge laws.

Why am I being charged a, Non Cash Adjustment?

Surcharging and Cash Discount has been a hot topic in the merchant services industry for the past few years. Some businesses argue that adding additional fees for customers that pay with a credit or debit card is a constitutionally protected first amendment activity while others feel that it is a nickel-and-dime tactic that makes customers angry.


The arguments stem from the fact that accepting a credit or a debit card costs a business from 1% – 3% of the total sale. Businesses feel that cardholders should be aware that credit card companies charge these fees.


Whether the fee is broken out as a separate line item or bundled into the cost of the product has become a topic of much debate.

Credit Card Receipt Printing from Mobile Phone

The History of Cash Discount vs Surcharging

Many federal appellate courts came to different conclusions in consideration of state surcharge laws and more precise questions on what constitutes a “Surcharge” versus a “Cash Discount” have been discussed. The specifics of what constitutes a surcharge and what constitutes a cash discount has remained a much-debated topic.


In the past few years, as a result of multiple court cases and rulings, the card brands have begun to drop their contractual obligations that restrict businesses from imposing surcharges on customers to offset their credit card processing fees.

Visa, Mastercard, Discover, and American Express Rules

Visa, Mastercard, Discover, and AMEX Company Logos

However, the specifics of Surcharging versus Cash Discounting are still a matter of debate. In practice, there is very little difference between the two and how the fees are expressed will determine which definition a business falls under.


The card brands and some states have specific rules that a business must follow in order for fees to be considered a surcharge or a cash discount. If a business does not abide by the rules and regulations of the card brands for cash discounting, they will automatically be considered to be surcharging and be subject to surcharging rules of the card brands and state laws.

Definitions and Regulations

Surcharging- A surcharge is an added fee on top of normal product pricing specifically for customers that are using a credit or debit card at checkout.
Credit Card Receipt Highlighting Surcharge
  • Surcharging Rules
  • States where Surcharging is Illegal Connecticut Maine Massachusetts
  • No Surcharging allowed on Debit Card Transactions
  • Surcharging may not exceed 3.00% of the Sale Price (Some States are Lower)
  • Notify Customers with Signage on the entrance and at checkout
  • Notify Customers with Signage on the entrance and at checkout
Cash Discount Offering a discount for paying in cash. Most merchants add “Non-Cash Adjustment” fees, “Admin Fees”, “Customer Service Fees”, and many other fees that are designed to appear as if they apply to all sales regardless of payment type. These fees are then “Discounted” or removed completely for customers that pay in cash.
Credit Card Receipt Highlighting Cash Discount
  • Cash Discount Rules-
  • Legal in all 50 States
  • Display both the Credit price and the Cash price (Dual Pricing)
  • Alternatively, advertise the Credit price and manually discount for cash.
  • Disclose discount with Signage at store entrance and at checkout.
  • Display discount as line item on receipt

Violations and Fines

As discussed previously, a business that is not operating in a manner that is compliant with Cash Discounting rules will automatically be considered to be Surcharging. While surcharging in itself is not illegal in most states, violations tend to arise in two specific scenarios.


  • Surcharges are being added to Debit Card Transactions
  • Surcharges are above the maximum amount of 3.00% (Lower for some states)


Monetary fines for violating surcharge rules vary depending on the length of time a business remains non-compliant.

First Notification of Non-Compliance $1,000 Fine
Compliance Deadline Not Met- $25,000 Fine
30 Days Non-Compliance $50,000 Fine
60 Days Non-Compliance $75,000 Fine
90 Days Non-Compliance $100,000 Fine
120 Days Non-Compliance $125,000 Fine
150 Days Non-Compliance $150,000 Fine
$25,000 Each Additional Month

The Bottom Line

Implementing a cash discount in a compliant manner is extremely important to get right the first time. Working with a processing company that knows the difference between what the card brands, and the law, considers to be a cash discount versus a surcharge is priority number one.


Synapse knows the difference and can keep you on the right side. Reach out to us today and get some of the “Best credit card processing fees” that are available in the industry today.

James Ritter Author Image


In 2009, James entered the electronic payments industry, discovering a landscape marred by unscrupulous sales reps exploiting small businesses. Committed to change, he educates and guides small business owners on navigating payment processing intricacies for the best rates.

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