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For most U.S. veterinary practices, a credit card surcharge is a way to pass part of an eligible card-acceptance cost to clients who choose to pay by credit card. It is a strategic option, not automatic savings. Whether it helps depends on state law, card-network rules, the processor contract, the share of payments the surcharge can legally reach, and whether clients keep paying the same way once they see the fee. Check those constraints first, then compare the surcharge with negotiating lower processing rates, changing processors, and offering other payment methods.
What a surcharge can recover, and what it cannot
A surcharge is a fee tied to a client’s use of a credit card. Its purpose is to recover some or all of the practice’s card-acceptance expense instead of absorbing that cost in overhead. It is not a profit center, and its size is limited in two ways.
First, Mastercard’s merchant surcharge rules say a brand-level surcharge may be no greater than the lesser of the merchant’s average effective Mastercard acceptance rate or the network cap. The page lists a 4% maximum, but a practice’s actual cost or a stricter state rule can require a lower figure. Second, GSA SmartPay’s bulletin 017, revised June 2, 2025, describes the same kind of cost-based limit and a 4% ceiling in its summary. Mastercard also sets separate rules for product-level surcharges, so a practice should not assume one percentage fits every card it accepts.
Two practical consequences follow. The surcharge can offset eligible processing expense, but under the Mastercard formula it cannot exceed the practice’s own average effective acceptance rate for that brand. And it reaches only the transactions it is allowed to reach. Shepherd Pay’s help documentation, for example, states that its feature applies to credit cards but not debit. Card-type classification is therefore part of the setup, not a detail.
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The figures behind the decision
Most published numbers on this topic come from a payment vendor or a veterinary trade publication. Both are useful for framing, but neither is an independent benchmark for your hospital.
Vendor-reported adoption and impact
AAHA’s April 10, 2026 article is labeled sponsored content by Scratch Financial. It attributes the following figures to Scratch’s own platform data:
- 55% of new practices joining the Scratch platform in 2025 opted for surcharging, up from 15% in 2024. This describes one platform’s new customers, not U.S. veterinary practices in general.
- An example surcharge of about 3%. It illustrates one configuration; the permissible amount depends on law and card rules.
- Approximately $30,000 in annual fees potentially saved by a clinic processing $2 million a year. This is an illustrative vendor calculation, not a guaranteed result or net savings for any particular hospital.
- Across more than 1,000 veterinary hospitals in the reported analysis, revenue and visits per customer stayed stable for 12 months after adoption, compared with non-surcharged controls. The accessible article does not describe the methodology, so selection effects and causation cannot be assessed.
Trade-press examples and context figures
Veterinary Practice News (October 14, 2025) includes its own examples and statistics, many carrying secondary citations. Treat them as context rather than headline benchmarks.
| Figure | What it describes | Source as reported | How to use it |
|---|---|---|---|
| $75,000 in annual processing fees, with a 3% surcharge | One clinic: Town and Country Veterinary Clinic, Russellville, Arkansas | Veterinary Practice News, 2025 | A single clinic’s account; verify independently before quoting |
| 1.9% to 5% interchange fees | Range cited for card-acceptance costs | Veterinary Practice News, citing a Zoetis article | A cited range, not any clinic’s effective rate |
| 10% to 15% average profit margin | Small-animal practices | Veterinary Practice News, with its cited source | Sector average; compare with your own financials |
| 15% to 25% average profit margin | Emergency and specialty hospitals | Veterinary Practice News, with its cited source | Sector average; compare with your own financials |
| 80% to 85% of practice revenue | Attributed to credit cards and third-party financing | Veterinary Practice News, with its cited source | Sector-level; measure your own payment mix |
| More than 60% increase in U.S. veterinary care costs | Over the prior decade | Veterinary Practice News, with its cited source | Cost trend context, not a practice metric |
| 41% of cardholders | Said they decided not to use a card when a business had a surcharge | J.D. Power survey, as reported by Veterinary Practice News | General consumer survey; not specific to veterinary clients |
| $67 average cash carried | Cash on hand among Americans | Veterinary Practice News, with its cited source | Context only; not a measure of client payment capacity |
| $580 dog and $433 cat veterinary care spending, 2024 | Average client spending | American Veterinary Medical Association, as reported by Veterinary Practice News | Attributed through the trade article’s references |
Build your own model instead of using averages
The vendor and trade figures point to the same conclusion: sector averages cannot set your rate, but your own transaction-level processing cost and payment mix can. No validated universal calculator or single optimal surcharge percentage is established in the published guidance. A workable model needs these inputs:
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- Annual card volume split between credit and debit, and the share of credit volume the surcharge can lawfully reach.
- Your effective acceptance cost by card brand, taken from processor statements rather than a sector estimate.
- Platform and processor fees charged for the surcharge feature.
- Expected payment shifts to debit, cash, check, or financing, and any client attrition.
- Refunds and disputes, including whether the surcharge is returned on them.
- Staff hours for explanations, exceptions, and reconciliation.
Roughly, the net effect is the surcharge recovered on eligible credit volume, minus platform and processor fees, minus surcharge income lost to clients who switch payment methods or leave, minus the staff cost of running the program. If that result is small or uncertain, the surcharge is unlikely to be the lever that matters most.
Check the four layers of rules
Four separate rule sets apply. A surcharge permitted under one can still be blocked by another, so confirm each before turning anything on.
State and local law
Some states prohibit or restrict surcharging, and local rules can add requirements. AAHA’s sponsored article reports that some states prohibit surcharging and includes a list. Vendor territory lists, such as Shepherd Pay’s, are product restrictions rather than a legal survey, and different lists do not agree. Confirm your state’s current statute with an attorney who handles payments law, and check the rules for the city or county where each location operates.
Card-network rules
Mastercard’s guidance requires clear disclosure at the point of interaction, including the surcharge amount, and the dollar amount of the surcharge on the transaction receipt. It also states plainly that its rules do not displace the law:
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“Nothing in the Mastercard rules affects any obligation of a merchant to comply with applicable state or federal laws, including but not limited to state laws that may prohibit or restrict surcharging of credit transactions, and federal and state laws regarding deceptive or misleading disclosures.” (Mastercard merchant surcharge rules)
GSA’s overview directs merchants to Visa and Mastercard policies, so the Visa rules must be checked separately for any Visa transactions the practice accepts.
Federal consumer protection
The FTC’s FAQ on its rule on unfair or deceptive fees says businesses may pass through credit card and other payment processing fees if otherwise permitted by law. That is a conditional permission, not a state-law clearance. When a viable no-fee payment method exists, card use can be optional for the rule’s total-price requirement, but the fee must still be disclosed, included in the final payment amount before the client consents to pay, and accurately described. When card payment is required, the fee is mandatory and belongs in the total price. Whether the rule applies depends on the transaction.
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Your processor agreement
The processor or acquirer contract can restrict surcharging, require advance notice, or specify how the fee must be configured. Vendor features may also be limited by territory, card type, or pricing setup. Get the processor’s written position before launch. A vendor’s marketing summary does not override the contract.
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Disclosure is the step practices most often leave until too late. Mastercard’s rules call for clear disclosure at the point of interaction and the dollar amount on the receipt. GSA’s bulletin calls for clear signage and a separate receipt line item. The FTC FAQ requires the fee to be part of the final payment amount before payment consent. A notice that appears only after an estimate, or only at final checkout, is too late to support an informed choice.
What the evidence says about client reaction
The evidence on client response is thin, and each data point has a limit.
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- Vendor analysis. Scratch reports stable revenue and visits per customer across more than 1,000 hospitals, but the analysis is sponsored and its method is not described in the accessible article.
- Practice accounts. Veterinary Practice News reports that one practice manager said fewer than 10% of clients questioned the policy. That is one practice’s experience and does not predict another clinic’s result.
- Payment mix. Dale Kaufman, DVM, is quoted in the same article: “A side effect of surcharging is more cash,” says Dr. Kaufman. The reported effect is a shift in how clients pay, which is the variable most worth tracking.
- General consumer survey. The J.D. Power figure of 41% of cardholders is about businesses in general, not veterinary clients.
The available published sources include no independent longitudinal veterinary study measuring the effect of surcharges on retention, visit frequency, or client lifetime value.
What to track after launch
- Eligible card volume and the share of total payments it represents.
- Surcharge income net of processor and platform fees.
- Shifts toward debit, cash, check, or financing.
- Failed or delayed collections and balances that become harder to close.
- Complaints, cancelled appointments, and visit frequency for affected clients.
- Staff time spent on explanations, exceptions, and bookkeeping.
Compare the alternatives
A surcharge competes with other ways to reduce payment cost. Veterinary Practice News reports that one practice decided against surcharging and changed processors instead. Its practice manager, Joel Gunderson of Lone Tree Animal Medical Center, said: “We switched to another credit card processor for better rates,” explains Joel Gunderson, practice manager. That makes processor negotiation a real alternative, not a footnote.
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|---|---|---|---|
| Surcharge eligible credit transactions | Recovers part of eligible acceptance expense, within network and state caps | Requires jurisdiction and network review, disclosure, staff training, and correct refund and reporting behavior | Network rules and vendor documentation describe the workflow; client response varies; no independent savings figure is established |
| Negotiate lower processing rates | Lowers the underlying cost without a client-facing fee | Review the current rate schedule, all-in pricing, and contract terms | Not stated: the published sources give no negotiated-savings figure |
| Change processor | May lower rates and improve practice-management integration | Compare all-in pricing, integrations, support, and exit terms | One practice example in Veterinary Practice News; no universal savings figure |
| Cash discount | Rewards payment by cash or another eligible method rather than labeling a fee on card use | Legal, network, and advertising treatment require review; keep posted prices transparent | Named as an alternative in Veterinary Practice News; no implementation guidance established in the published sources |
| Digital payment options | May give clients a convenient alternative and shift the payment mix | Check fees, settlement timing, integration, and access for clients who do not use digital wallets | Named as a possible alternative in Veterinary Practice News; cost and compatibility are practice-specific |
| Keep current pricing and absorb fees | No client-facing payment fee | Processing expense stays in operating costs | Baseline for comparison; the published sources do not quantify its effect for a typical hospital |
Do not use “surcharge” as a synonym for “convenience fee” or “cash discount.” AAHA’s sponsored article describes convenience fees as typically tied to card-not-present payment channels, while surcharges are tied to credit card use. Definitions vary by regulator, network, and processor, so use the terms your processor and state use in writing.
A decision sequence for practice owners
Work through these steps in order and stop at the first one that fails.
- Confirm that your state and local rules allow surcharging for the card types you accept. If they do not, the surcharge is off the table, and the choice becomes rates, processor, or payment-method options.
- Confirm the network and processor terms, including the Mastercard cap and any brand-specific requirements.
- Measure eligible credit volume and your effective acceptance cost from processor statements.
- Obtain written quotes for a negotiated rate and for a processor switch, and compare all-in cost.
- Model the net result using the inputs above, testing it with conservative assumptions about payment shifts.
- If the result is clearly positive and the rules allow it, proceed to rollout.
Vendor questions and rollout
Questions to put to a payment vendor
Shepherd Pay’s help page is a useful example of what a vendor should document. It states that its surcharge feature is unavailable in Connecticut, Maine, Massachusetts, New York, and Puerto Rico; applies to credit cards but not debit; displays the charge before payment approval; is fixed at 3%; appears separately in reporting; and is included in standard refunds. Features and territory eligibility can change, so confirm each point with any vendor in writing. Ask:
- Which states and territories are excluded, and how does the platform enforce that?
- How are credit and debit cards identified, and what happens when a card is misclassified?
- Is the percentage fixed or adjustable, and can it be capped by card brand?
- Where does the surcharge appear: on the client-facing screen before approval, on the receipt, and in reports?
- Is the surcharge returned on full refunds, partial refunds, and disputes?
- What are the platform and processor fees for the feature, and how are they billed?
- How much notice will you receive if the vendor or processor changes the rules?
Rollout steps
- Obtain written sign-off on the exact fee wording, the percentage, and the eligible card types from counsel and your processor.
- Configure the terminal or payment software so only eligible transactions carry the fee. Test one credit sale, one debit sale, and one refund before live use.
- Post the policy on your website, on new-client forms, and with in-clinic signs. Send existing clients advance notice by email or text message.
- Train reception and technical staff on eligible card types, how to explain the fee in one sentence, and the cash, check, debit, and digital-wallet alternatives.
- Check the first live receipts for a separate surcharge line, and confirm that the amount matches what the client agreed to.
- Reconcile the first billing cycle against processor statements, including refunds.
- Review the tracking metrics on a fixed schedule, and be ready to change or switch off the policy if the net result or client response is not what the model predicted.
Hardware and signage purchases do not answer the legal or strategic questions above, so treat them as implementation details that follow the decision.
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