1. Overview: Why Laundromats Consider Surcharging

Card acceptance has become standard for self‑serve and pickup/delivery laundromats, yet credit card processing commonly costs small operators roughly 2–3.5% per transaction. With thin margins on wash/dry cycles, supplies, and labor, many owners look to recover these fees through a surcharge or similar pricing strategy. Legality, however, depends on a mix of card‑network rules, federal requirements, and state law.

2. The Rules That Apply Everywhere (Federal + Card Networks)

2.1 Federal baseline

There is no federal ban on credit‑card surcharges. Federal law allows surcharging so long as the fee is not applied to debit/prepaid cards, and disclosures are not deceptive. Most compliance obligations come from card‑network rules rather than statute. (Sources: Visa merchant surcharging guidance; state‑by‑state legal overviews.)

2.2 Visa and Mastercard network rules

If you surcharge Visa or Mastercard credit cards, you must follow these network obligations:

• Surcharge only credit cards, not debit or prepaid.
• Cap at the lesser of (a) your actual cost of acceptance or (b) the network cap. Visa’s cap is generally 3%; Mastercard’s is generally 4%.
• Provide clear disclosure before the customer pays (signage at entry/checkout or online notice), and on the receipt.
• Notify your acquiring bank/processor and Visa/Mastercard at least 30 days before starting. (Sources: Visa “U.S. Merchant Surcharge Q&A” and “Merchant Surcharging Considerations”; Mastercard U.S. surcharge rules; multiple 2025 compliance summaries.)

2.3 Convenience fee vs. surcharge vs. cash discount

• Surcharge: Added only when paying by credit card.
• Convenience fee: Charged for using a non‑standard payment channel (e.g., paying an invoice online when you normally accept payment in person). These have stricter rules and are often disallowed for routine point‑of‑sale laundromat transactions.
• Cash discount: Posted prices are “credit price,” and customers get a discount for cash/ACH. This is legally simpler in many states and sometimes better received by customers.

3. State‑by‑State Legal Landscape for Laundromats

3.1 Tennessee

Current status (Dec 2025): Tennessee allows credit‑card surcharges. Tennessee does not impose a separate state surcharge cap, so the practical limit is the card‑network cap and your actual cost of acceptance. Businesses must avoid deceptive practices under the Tennessee Consumer Protection Act, meaning disclosure must be clear and upfront. There is no active Tennessee statute banning card surcharges as of 2025. (Sources: LegalClarity Tennessee surcharge analysis, Feb 2025; Nickel Tennessee guide; FlexPoint Tennessee guide.)

3.2 Kentucky

Current status (Dec 2025): Kentucky allows credit‑card surcharges, but with a state‑level cap and rules. Recent Kentucky legislation (often cited as HB 529 / similar bills) permits surcharging so long as the fee does not exceed the lesser of your actual interchange/processing cost or 3%, and you provide advance disclosure. Kentucky had older bills proposing a blanket ban on surcharges, but those proposals are not the current rule. (Sources: Kentucky legislative text in KRS Chapter 365 surcharging bills; FlexPoint Kentucky guide citing the bill; Nickel Kentucky summary.)

3.3 Alabama

Current status (Dec 2025): Alabama has no known state law prohibiting credit‑card surcharges. Therefore, laundromats may surcharge under federal and network rules. The effective cap is Visa/Mastercard limits and your actual processing cost. (Sources: FlexPoint Alabama guide, Nov 2025; Merchant Cost Consulting Alabama guide; Nickel Alabama summary.)

4. Practical Compliance Checklist for a Laundromat

1) Confirm your processor supports surcharging (some do; QuickBooks Payments, for example, does not auto‑add surcharges).

2) Calculate your average credit‑card cost of acceptance by card type.

3) Set surcharge at or below your cost, and never above 3% if you accept Visa.

4) File 30‑day notice with acquirer and networks.

5) Post signage: at store entrance, at each kiosk/POS, and/or in your app/online invoice portal.

6) Ensure receipts show the surcharge as a separate line.

7) Do not surcharge debit/prepaid even if run “as credit.”

5. Customer Willingness in the Laundromat Context

5.1 What the research and industry experience suggest

Laundromats serve a mix of cash‑preferring customers and convenience‑driven card users. In this category, willingness to accept fees is heavily shaped by transparency and alternatives. General merchant and payments research shows that customers are more accepting when:

• the fee is clearly disclosed before they start a transaction,
• the fee is modest (around 2–3%),
• they have a fee‑free alternative such as cash, ACH, or a loyalty/app balance, and
• the surcharge is framed as a “credit card convenience fee” rather than a surprise add‑on. (Sources: Visa merchant surcharging considerations about customer perception; 2025 merchant compliance guides.)

5.2 Specific laundromat dynamics

• Self‑serve cycles are small‑ticket items ($3–$8). Even a 3% surcharge is only a few cents, so many card users won’t strongly object if told upfront.
• Larger tickets (wash‑dry‑fold, commercial accounts, pickup/delivery) are where surcharging meaningfully offsets costs, but customers will notice more. In these cases, quoting prices with the surcharge already included, or offering ACH discounts for recurring clients, tends to reduce friction.
• Neighborhood expectations matter: in areas where other local businesses surcharge, customers treat it as normal.

5.3 How to message it

Best‑practice messaging for laundromats is short and neutral: “Cash price shown. A 3% fee applies to credit card payments. Debit cards are not charged. Thank you for helping us keep wash prices low.” This aligns with network disclosure rules and minimizes the sense of penalty.

6. Legal and Business Risks to Watch

• Failure to disclose properly can trigger card‑network fines or forced rollback.
• Charging above your actual cost or above Visa/Mastercard caps is non‑compliant.
• Applying to debit/prepaid is a common and serious violation.
• State consumer‑protection laws (all three states) can treat hidden fees as deceptive trade practices.
• Reputational risk: a surprise fee can push customers to competitors, especially with app‑based laundries.

7. Recommended Approaches for Laundromats in These States

1) For unattended/self‑serve stores: consider a posted “credit price” with a cash discount, or a small surcharge on credit only, clearly labeled at kiosks.

2) For WDF and delivery: quote customers both an ACH/cash price and a credit price; some operators build the fee into list prices and offer a discount for ACH.

3) Reassess annually as interchange and state rules change.

References

Visa. “U.S. Merchant Surcharge Q&A” and “Merchant Surcharging Considerations and Requirements,” accessed 2025. (turn0search3; turn0search28)

Mastercard. “Merchant Surcharge Rules (U.S.),” accessed 2025. (turn0search7)

LegalClarity.org. “Tennessee Credit Card Surcharge Law: What Businesses Need to Know,” Feb 24, 2025. (turn1search3)

Nickel. “Tennessee Credit Card Surcharge Laws” and “Kentucky Credit Card Surcharge Laws,” accessed 2025. (turn1search12; turn1search16)

FlexPoint / getflexpoint.com. State surcharging guides for Tennessee, Kentucky, Alabama, last updated 2025. (turn1search6; turn1search7; turn1search5)

Merchant Cost Consulting. State surcharging summaries for Tennessee and Alabama, 2025. (turn1search0; turn1search2)

Kentucky General Assembly legislative text on surcharges (e.g., HB 259 / HB 529 style provisions), accessed 2025. (turn1search1)