A combination of scanning tunneling microscopy, subtractively normalized interfacial Fourier transform infrared spectroscopy (SNIFTIRS), and density functional theory (DFT) is used to quantify the local strain in 2D Pt clusters on the 100 facet of Pd and its effect on CO chemisorption. Good agreement between SNIFTIRS experiments and DFT simulations provide strong evidence that, in the absence of coherent strain between Pt and Pd, finite size effects introduce local compressive strain, which alters the chemisorption properties of the surface. Though this effect has been widely neglected in prior studies, our results suggest that accurate control over cluster sizes in submonolayer catalyst systems can be an effective approach to fine-tune their catalytic properties.