20.2.9.1. Donated Admin Fee vs. Mandatory Admin Fee

Why a Mandatory Processing Fee Isn’t Allowed

Many clinics have requested the ability to add a mandatory “credit card processing fee.” After extensive legal review, we determined that approach isn’t feasible due to evolving state and federal laws—and credit card company rules.

1. Drip Pricing Laws

Many states, as well as the Federal Trade Commission (FTC), now prohibit “drip pricing,” which is the practice of advertising a lower price upfront and adding mandatory fees later in checkout. Examples include:

• California SB 478 – Bans hidden fees statewide (effective July 1, 2024)
• Minnesota – New law effective 2025
• Colorado – Enacted “junk fee” measures including rentals
• New York & Connecticut – Require all-in pricing in ticketing

At the federal level, the FTC’s Rule on Unfair or Deceptive Fees (effective May 12, 2025) specifically outlaws hidden fees in live-event ticketing and short-term lodging. It also strengthens case-by-case enforcement in other industries. Because these regulations vary by state and are tightening quickly, we cannot support a mandatory “Processing Fee” that risks non-compliance.

2. Credit Card Brand Rules

Visa and Mastercard also limit how processing costs can be passed on to customers. They allow credit card surcharges only under strict conditions, including:

• No surcharges on debit or prepaid cards
• Caps and specific disclosure requirements
• Compliance with all state laws
• Violating these rules can result in significant penalties. Combined with new “total price” laws, a mandatory processing fee may be illegal or non-compliant in many jurisdictions.

Why the Donated Administration Fee Is the Best Option

The Donated Administration Fee is a voluntary, clinic-defined amount that a client can choose to contribute. If they opt in, the donation helps offset your processing and administrative costs. If they decline, they pay only the published price.

This approach:

• Keeps your pricing transparent
• Complies with state and federal laws
• Aligns with Visa/Mastercard requirements
• Protects your clinic from unnecessary legal and financial risk

We understand many clinics would prefer a mandatory processing fee, but this path ensures your clinic remains fully compliant while still offering a way to recover costs.