Is a cash discount legal in California?
Short answer: California bans credit card surcharges, though federal court rulings limit how it can be enforced. A cash discount with both prices posted before payment is not a surcharge under Visa’s rules, and federal law protects discounts for cash. California law allows discounts for paying cash if they’re offered to all buyers.
California at a glance.
Surcharges banned
- Surcharges
- Civil Code 1748.1 bars retailers from adding a surcharge for credit card use. In Italian Colors v. Becerra (9th Cir. 2018) it was held unenforceable against merchants like the plaintiffs; the Attorney General says it will apply that ruling to similarly situated merchants. Since 1 July 2024 (SB 478) advertised prices must include mandatory fees; the AG says a card fee is not mandatory if the customer can pay another way, but is if the business takes only cards. Restaurants have a separate exemption (SB 1524) if fees are shown wherever prices appear.
- Cap
- Not applicable: the statute bars surcharges.
- Debit cards
- The statute allows discounts for paying by cash, check or other means. Network rules bar debit surcharges.
- Cash discount with both prices
- Discounts for cash or other means are allowed if offered to all buyers (1748.1). The AG warns merchants not to advertise a lower price than they charge or hide differences between cash, credit and debit prices.
- Law
- Cal. Civ. Code 1748.1; Cal. Civ. Code 1770(a)(29) (SB 478)
Conflicting: statute verified (public.law copy and AG page); its enforceability after Italian Colors is unsettled. Treat as a ban for marketing.
What to post on your tags.
- Show the cash price and the card price on every tag, menu or price list, the same size.
- Charge the posted price for how the customer pays. Don’t add a fee, “service charge” or “non-cash adjustment” at the register.
- Put a sign at the door and the counter explaining the two prices.
- Debit pays the posted card price. Never add a fee to debit.
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Questions owners ask.
Can a business in California charge a fee for using a credit card?
California’s law bans credit card surcharges. Civil Code 1748.1 bars retailers from adding a surcharge for credit card use. In Italian Colors v. Becerra (9th Cir. 2018) it was held unenforceable against merchants like the plaintiffs; the Attorney General says it will apply that ruling to similarly situated merchants. Since 1 July 2024 (SB 478) advertised prices must include mandatory fees; the AG says a card fee is not mandatory if the customer can pay another way, but is if the business takes only cards. Restaurants have a separate exemption (SB 1524) if fees are shown wherever prices appear.
Can I charge more for debit cards in California?
Not as a fee. The statute allows discounts for paying by cash, check or other means. Network rules bar debit surcharges. With a cash discount, debit pays the posted card price.
Is a cash discount legal in California?
Discounts for cash or other means are allowed if offered to all buyers (1748.1). The AG warns merchants not to advertise a lower price than they charge or hide differences between cash, credit and debit prices. Post both prices before the customer pays and add nothing at the register.
Sources
General information, not legal advice. Rules change and differ by state and city; check the rules where your business is. See our terms and disclaimers.