Usually, the contract a business signs with the credit card processor says that they're not allowed to charge more for credit card purchases than cash purchases. Obviously, this is intended to prevent customers from being dissuaded to use credit cards.

Since his customers are really the cosmetologists and not the clients, I'd be inclined to say that this is in violation of his contract with the credit card processor, but adding that extra layer in there does add a new layer of complexity.

If I were your fiancee, I'd accept it and start looking for a new place to rent, especially if she has a clientele that will follow her.