Louisiana shoppers are getting new protections at the checkout counter after a state law, signed by Governor Jeff Landry on June 2, took effect on August 1, banning retailers from adding surcharges to debit card purchases.
The measure, Senate Bill 254 (now Act 751), prevents businesses from charging customers any additional fee for the privilege of paying with a debit card and gives the Louisiana Attorney General the authority to investigate complaints and pursue enforcement actions against violators.
The new law comes amid growing frustration over so-called “junk fees,” which are hidden, or surprise charges that often are not disclosed until late in the checkout process.
Supporters argued that consumers shouldn’t face extra costs simply for using money directly from their bank accounts through a debit card.
The law defines a “surcharge” as any extra fee added to a purchase because a customer chooses to pay with a debit card rather than another payment method such as cash or a check. In practice, the measure prohibits businesses from imposing an additional charge on customers solely for using a debit card at checkout.
Businesses that violate the law can be reported to the attorney general, while affected consumers can also pursue damages under certain circumstances.
Before filing a lawsuit, consumers must notify the business in writing and give it 30 days to reimburse the surcharge and correct the violation.
If the business fails to comply, legal action may proceed. The attorney general can also seek civil remedies, and businesses that violate enforcement orders may face penalties of up to $500 per violation.
Newsweek has reached out to the Consumer Federation of America by email for comment.
What Does It Mean for Shoppers?
For most consumers, the practical impact is straightforward: If a store, restaurant, or online retailer in Louisiana adds a separate fee because a customer uses a debit card, that charge is now prohibited under state law.
Consumers who believe they’ve been charged an unlawful surcharge can submit complaints to the Louisiana Attorney General’s Office.
However, shoppers might not notice dramatic changes at many businesses because major payment networks already prohibit debit card surcharges nationwide.
Isn’t This Already Banned?
In many cases, yes.
Visa and Mastercard rules have long prohibited sellers from imposing surcharges on debit card transactions, even where surcharges are permitted on credit cards. Louisiana’s new law gives consumers and state regulators a direct legal avenue to challenge violations, adding state-level enforcement to protections that previously relied largely on card-network rules.
For example, imagine a convenience store adds a $1 fee whenever a customer pays with a debit card.
- Before August 1: The store could be violating Visa or Mastercard rules, but enforcement would generally come from the payment network or processor.
- After August 1: The store is violating both the card-network rules and Louisiana law. Consumers can file complaints with the attorney general, and the state can pursue enforcement.
Several other states, among them Texas, Maine, and Connecticut, have also enacted laws restricting or prohibiting debit card surcharges, but the vast majority have no separate legislation banning them.
The distinction matters because card-network rules are typically enforced by payment processors and card companies, whereas state laws can empower attorneys general and consumers to pursue complaints directly through legal channels.
What About Credit Cards?
The rules for credit cards are different.
In most states, merchants are allowed to impose credit card surcharges to help offset processing costs, although those fees remain subject to state laws and card-network restrictions.
Visa and Mastercard generally cap surcharges at the merchant’s actual processing cost and require businesses to follow disclosure requirements. As a result, consumers might still encounter fees for using a credit card even where debit card surcharges are prohibited.
Surcharge vs. Cash Discount
The distinction between a surcharge and a cash discount can be confusing.
A surcharge is an extra fee added to the advertised price when a customer pays with a card.
For example:
- Posted price: $100
- Debit or credit card surcharge: $3
- Total paid: $103
A cash discount, by contrast, starts with a higher listed price and offers a reduction for paying with cash.
For example:
- Posted price: $103
- Cash discount: $3
- Cash total: $100
Louisiana’s new law prohibits businesses from adding a fee because a customer uses a debit card, but it doesn’t prevent merchants from still offering discounts for cash payments.
Key Takeaway
For consumers, the takeaway is simple: In Louisiana, using a debit card should no longer trigger an extra charge at checkout.
While similar protections already exist through card-network rules and in several other states, the new law gives shoppers a clearer path to report violations and gives state officials additional authority to crack down on businesses that ignore the rules.
Contact Newsweek editors for this story: Ben Kelly and Robert Greenall