The Green Sheet Online Edition
August 10, 2026 • 26:08:01
Louisiana's debit surcharge law: New law, familiar rules
On June 2, 2026, Louisiana's governor signed SB 254 into law, which bans debit card surcharging and provides a private right of action for shoppers who are wrongly surcharged. SB 254 (now Act No. 751) enacts Louisiana Revised Statutes 51:3081 and 51:3082 and says "[i]n a sale of goods or services, a retail business shall not impose a surcharge on a cardholder who uses a debit card instead of cash, check, credit card, or any other similar means of payment."
It defines a surcharge as "any additional amount of money imposed at the time of the transaction by a retail business that increases the charge to the cardholder for the privilege of using a debit card." The act went into effect on Aug. 1, 2026.
Louisiana legislators seem to have overlooked one small detail, however: merchants are not allowed to surcharge debit cards anyway.
Card brands Visa and Mastercard explicitly prohibit surcharging on anything but a credit card. Merchants thus are not allowed to surcharge debit cards, even if a debit cardholder chooses "credit" instead of "debit" at the POS. Visa has clarified that instead of referring to a payment method, this distinction applies only to whether the card is run as a signature debit transaction instead of a PIN debit transaction. Furthermore, as most merchants and other industry participants are aware, Visa strictly enforces its surcharge rules. Not only does Visa utilize secret shoppers, whose goal is specifically to identify rule violations, Visa also hosts an easily accessible page solely for consumer complaints. Merchants caught surcharging non-compliantly face immediate fines of $1,000, and fines quickly increase. Although American Express technically required surcharging on debit cards until recently, Mastercard and Visa rules did not allow merchants to accept AmEx cards while surcharging Visa/Mastercard cards. In reality, merchants generally could not surcharge AmEx debit cards. Thus, even before Act No. 751, merchants were prohibited from surcharging on debit cards.
Does this help consumers?
The statute provides a private right of action for cardholders who are surcharged when paying with debit cards only if the merchant fails to refund the cardholder within 30 days after written notice that the merchant violated the debit surcharge law or if the merchant engages in repetitive or willful misconduct.
Even then, the cardholder can only recover their "actual damages." So even if cardholders are improperly surcharged on debit, they likely will not get anything but a small refund. However, recovery caps may not stop a cardholder from trying to squeeze damages out of merchants for improper surcharges. As the law has garnered significant media attention, at least some cardholders will likely be on the prowl for debit surcharge infractions.
Overall, Act No. 751 does not appear to materially help consumers. Given the regulations, private rights of action may be hard to come by and damages awards for private citizens will likely be modest. Furthermore, any merchant surcharging debit cards in bad faith is unlikely to be deterred by small damages awards if they are unfazed by Visa's brutal fine regime. Act No. 751 may, however, put merchants in a tight spot if consumers are intent to manufacture violations.
So does the law do anything?
Act No. 751 does not prevent compliant surcharging on credit cards, nor does it prevent cash discounting or dual pricing. The law only applies to charges that increase the cost to use a debit card. Thus, merchants that are already compliantly surcharging, cash discounting or dual pricing should be able to continue without issue so long as they transparently emphasize that whatever differential pricing scheme they employ has no bearing on the cost to pay by debit card.
Commentators have warned, however, that this law could impact convenience fees for the use of debit cards, meaning any merchants with convenience fee programs should review to ensure compliance. However, in the grand scheme of things, Act No. 751 will likely not have much of an impact.
What's the deal with this law, then?
Act No. 751 is one of many laws in a growing push to regulate the merchant discount rate and the cost to pay with credit or debit cards. Increasingly, state and federal regulators have been clamoring to regulate merchant fees and other associated costs to consumers. At the federal level, the Credit Card Competition Act, for example, would have mandated that credit cards be dual branded in the same manner as debit cards following the Durbin Amendment and would have also required that a new card brand enter the market.
Some states, on the other hand, are attempting to regulate one or more aspects of merchant prices. For example, Colorado recently passed a price transparency law similar to those in California and Minnesota. Meanwhile, Illinois has been struggling against the opposition from banks and federal agencies to gain traction with its Interchange Fee Prohibition Act, which is intended to prohibit interchange on tax and tips. As state-level laws on surcharging and interchange continue to proliferate, the card networks will begin to strain. Many have cautioned that the networks could become overburdened if states continue to propose and pass laws without considering the larger payment ecosystem or the networks' functionality.
Although with a noble goal of consumer protection in mind, Louisiana legislators have added to existing difficulties by creating legislation that simply echoes current card brand rules. Ultimately, instead of clarifying the legal landscape and protecting consumers, the Louisiana law complicates existing differential pricing structures and hinders merchants seeking regulatory compliance. 
Jessica Walsh is a contract attorney who focuses on electronic transactions, including SaaS, merchant processing, agent/reseller, independent sales organization, and other related agreements. She regularly drafts, revises, and negotiates agreements tailored to her clients' operational and regulatory needs. She also advises clients on card brand rules and state regulatory requirements related to differential pricing. Contact her at jwalsh@attorneygl.com.
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