What New State Laws Mean for Surcharging, Cash Discount and Dual Pricing
Merchants across the country are looking for ways to manage rising card-acceptance costs. At the same time, lawmakers and regulators are paying closer attention to how those costs are presented to consumers—especially when a fee appears only after a customer chooses a card or reaches the checkout screen.
Several recent state developments make one point clear: the name assigned to a program matters far less than how it actually works.
A fee does not become a cash discount simply because it is labeled a “non-cash adjustment.” Running a debit card without a PIN does not turn it into a credit card. And a sign near the register may not be enough if a state requires the full card price to appear on menus, websites or ordering apps.
For many merchants, a properly implemented dual-pricing program remains the clearest path forward. Instead of adding a surprise fee at checkout, dual pricing presents the card price as the regular price and offers customers a lower price when they pay with cash. That distinction is increasingly important—but only when the pricing, technology and disclosures all match.
First, Know the Difference
Although the terms are often used interchangeably, they describe different pricing structures:
Credit card surcharge: An additional amount is added because the customer uses an eligible credit card. Surcharges are subject to state law and card-brand requirements, including limits, disclosures and restrictions on eligible card types.
Cash discount: The merchant posts a regular price and gives customers a reduction for paying by cash or another qualifying method. Federal law recognizes properly disclosed cash discounts offered to all prospective buyers.
Dual pricing: The merchant displays both a card price and a cash price, or clearly establishes the card price as the regular price while showing the available cash savings. The card customer pays the displayed card price; the cash customer receives the lower price.
The practical test is simple: Did the customer see the price they would pay by card before reaching checkout, or was an amount added afterward? Regulators, courts and card networks are likely to look at the substance of the transaction—not the terminology printed on a receipt.
Louisiana Prohibits Debit Card Surcharges
Effective August 1, 2026, Louisiana Act 751 prohibits a retail business from imposing a surcharge on a customer who uses a debit card instead of cash, check, credit card or another similar payment method.
The law defines a surcharge functionally as an additional amount imposed at the time of the transaction that increases the charge for the privilege of using a debit card. It applies broadly to persons and entities selling goods or services.
That means merchants should not assume a debit transaction becomes surcharge-eligible because it is routed over a credit network, processed without a PIN or described as “running debit as credit.” The funding source is what matters. Mastercard likewise states that checkout surcharges are not allowed on Debit Mastercard or Mastercard prepaid cards.
Louisiana also created meaningful enforcement tools:
A cardholder may recover actual damages for a willful, repeated or uncured violation.
Before filing suit, the cardholder must give written notice. A merchant can prevent the private claim by correcting the violation and reimbursing the surcharge within 30 days.
The Louisiana Attorney General may bring an enforcement action and must maintain a toll-free number and electronic complaint system.
Violating an administrative or court order may result in a civil penalty of up to $500 per violation.
What Louisiana merchants should do now
Merchants and agents should test debit and prepaid transactions at the terminal, review receipts and verify that no added fee is being applied. A configuration that identifies a debit card but still adds a checkout charge needs immediate attention.
Act 751 does not expressly prohibit legitimate dual pricing. If the card price is the actual posted regular price and a customer receives a genuine reduction for paying cash, the transaction is materially different from adding a debit surcharge. However, a merchant cannot convert an added debit fee into a lawful program merely by calling it a “cash discount.”
Florida Expands Restaurant Fee Disclosures
Beginning July 1, 2026, Florida’s restaurant disclosure law treats mandatory credit card surcharges, service charges, automatic gratuities and delivery fees as “operations charges.” The law applies to public food service establishments that require customers to pay such a charge in addition to the cost of food and beverages.
For restaurants using an added credit card fee, a door decal or terminal sign alone is not enough. The establishment must disclose the amount or percentage and the purpose of the charge on applicable:
Food menus
Written contracts
Websites
Mobile apps where customers place orders
The notice must use a font at least as large as the font used for menu-item descriptions or the general provisions of a written contract. Establishments without menus, table service or relevant written contracts must place an obvious, clearly readable notice on the menu board or near the register.
The customer’s bill must also state the amount or percentage of the operations charge. Receipts must provide separate lines for gratuity, operations charges and sales tax. If an operations charge includes an automatic gratuity, that gratuity must be separately stated.
The statute does not create a private cause of action and excludes certain dining plans, packages and fixed-price meals whose price is disclosed before purchase. Even so, the operational burden is significant: restaurant pricing must remain consistent across the menu, website, app, POS, bill and receipt.
Why dual pricing can simplify the Florida conversation
Florida defines an operations charge as a required charge paid in addition to the cost of the food and beverages. That makes the posted price especially important.
In a genuine card-price-first dual-pricing program, the displayed menu price is the amount charged when a customer pays by card, while cash customers receive a disclosed discount. The program is not relying on an extra card fee added to the menu price. Restaurants should still confirm that every ordering channel shows the correct price and should not assume signage can cure a POS that adds an amount beyond the displayed price.
Illinois Delays Its Interchange Fee Law Until 2027
Illinois has postponed the effective date of its Interchange Fee Prohibition Act from July 1, 2026, to July 1, 2027.
If implemented, the law would prohibit interchange fees on the tax and voluntary gratuity portions of an electronic payment transaction when the merchant transmits the necessary data. A merchant that does not transmit the information could submit transaction documentation later and seek a credit under the statutory process.
For now, processors and merchants do not need to suppress interchange on Illinois tax and gratuity amounts under the IFPA. Materials stating that the requirement took effect in July 2026 should be corrected.
The delay is not the only uncertainty. The IFPA has been the subject of federal preemption litigation, and in April 2026 the Office of the Comptroller of the Currency concluded that federal law preempts the act as applied to national banks and federal savings associations. Illinois has now delayed implementation while the legal and operational picture continues to develop.
The best current message is straightforward: Illinois delayed implementation for one year. The tax-and-tip interchange restriction is not presently effective, and no one should promise a particular 2027 processor solution until the litigation and implementation requirements are settled.
It is also important to distinguish the Illinois issue from consumer surcharging. The IFPA regulates whether interchange may be charged on portions of a transaction; it does not authorize a merchant to add a fee to a customer’s bill or replace applicable surcharge, disclosure or dual-pricing requirements.
Choosing the Right Payment-Pricing Program
No single payment-pricing model is right for every merchant. SignaPay offers dual pricing, cash discount and credit card surcharge programs, allowing businesses to select an approach that fits their industry, customers and applicable state requirements.
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Dual pricing establishes the card price upfront while offering customers a lower price for paying with cash.
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Cash discount provides a clearly disclosed reduction from the regular posted price when a customer pays with cash or another qualifying payment method.
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Credit card surcharge adds a disclosed fee to eligible credit card transactions, subject to state law, card-brand rules and other program requirements.
Each approach can help merchants manage card-acceptance costs, but proper implementation is essential. Pricing must be communicated clearly across signage, menus, websites, ordering apps, terminals and receipts. Debit and prepaid cards cannot be surcharged, and merchants must follow applicable state, card-brand, tax and industry-specific requirements.
The right program begins with understanding how a merchant advertises prices, accepts payments and interacts with customers. SignaPay helps businesses evaluate their options and implement a compliant, transparent program supported by the right payment technology.
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