No, offering a discount to customers who choose to pay with cash is a completely different situation than adding a surcharging, convenience fee when it comes to the card brands’ regulations. Surcharging Credit Cards: Surcharging is allowed under specific situations determined by the card associations but it is not common. Surcharging is adding a penalty fee only to customers who use a credit card and is illegal in ten states .Advantages of Cash Discount: Conversely, a merchant is always allowed to give their customers a discount on their products and services as they see fit. Cash discounting is just the business owner exercising this given right and is legal in all 50 states.