Credit Card Surcharge Advisory Bulletin:
Alternatives to Credit Card Surcharges
Section 339.001 of the Texas Finance Code prohibits credit card surcharges. This bulletin describes five alternative pricing practices that are not prohibited credit card surcharges. Section 339.001(a) of the Texas Finance Code provides: “In a sale of goods or services, a seller may not impose a surcharge on a buyer who uses a credit card for an extension of credit instead of cash, a check, or a similar means of payment.” There are five main alternatives to a prohibited credit card surcharge:(1) uniform pricing, (2) a uniform convenience fee, (3) a cash discount,(4) an option to pay by credit card with no fee, and (5) a third‐party payment processor.
Cash discount for businesses to offer customers:
Section 339.001 prohibits surcharges for paying by credit card, but it does not prohibit discounts for paying by cash, check, debit card, or other methods.A surcharge is an increase from the regular price of a good or service, but a discount is a decrease from the regular price.
The federal Truth in Lending Act allows sellers to have two prices (one for cash and one for credit), as long as the credit‐card price of the good or service is also the regular price. 15 U.S.C. §§ 1602(q), (r), (y), 1666f.
Contact U.S. Merchant Payment Solutions to find out how your business can offer a cash discount that effectively eliminates credit card processing fees to your business.
Call Ken Givens 512-848-1059 or 254-863-2567 or 888-995-3995.