Is a cash discount legal in Texas?
Short answer: Texas 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. Texas’s court case turned on how a price difference is described, which favours posting the card price and discounting cash.
Texas at a glance.
Surcharges banned
- Surcharges
- Statute bars a seller from imposing a surcharge for credit card use. Rowell v. Paxton (W.D. Tex. 2018) held it unconstitutional as applied to the plaintiff merchants and enjoined enforcement against them. The Attorney General (KP-0257, 2019) says it remains enforceable in some contexts, for example surcharges above the cost of acceptance.
- Cap
- Not applicable on paper; see conditions.
- Debit cards
- Banned: a merchant may not surcharge a debit or stored value card (Bus. & Com. Code 604A.002). Not challenged in Rowell.
- Cash discount with both prices
- Not addressed in the statute; Rowell turned on how a price difference is described, which favours a posted card price with a cash discount.
- Law
- Tex. Bus. & Com. Code 604A.0021 (credit); 604A.002 (debit)
Conflicting: statute text verified (public.law copy citing statutes.capitol.texas.gov); enforceability split between Rowell and AG opinion KP-0257.
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.
Paymantis sets up cash discount processing for independent shops in Texas: free sign-up, free monthly service and a free terminal, with tags and signs worded for your state. Get started free.
Questions owners ask.
Can a business in Texas charge a fee for using a credit card?
Texas’s law bans credit card surcharges. Statute bars a seller from imposing a surcharge for credit card use. Rowell v. Paxton (W.D. Tex. 2018) held it unconstitutional as applied to the plaintiff merchants and enjoined enforcement against them. The Attorney General (KP-0257, 2019) says it remains enforceable in some contexts, for example surcharges above the cost of acceptance.
Can I charge more for debit cards in Texas?
Not as a fee. Banned: a merchant may not surcharge a debit or stored value card (Bus. & Com. Code 604A.002). Not challenged in Rowell. With a cash discount, debit pays the posted card price.
Is a cash discount legal in Texas?
Not addressed in the statute; Rowell turned on how a price difference is described, which favours a posted card price with a cash discount. 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.