Three programs promise to help card sales pay for card processing: dual pricing, cash discounts and surcharges. To customers they can look similar. Legally, especially in Texas, they're not the same thing.
Surcharge: a fee added for paying by credit card
A surcharge adds a fee on top of the posted price when a customer pays with a credit card. A $100 item becomes $103 at checkout. Card networks have their own surcharge rules on caps, disclosure and notice, and several states have restricted surcharging.
Cash discount: a lower price for paying cash
With a cash discount, your posted price is the regular price, and customers who pay cash get a discount at checkout. The receipt shows the discount. Because it's structured as a discount for cash rather than a fee for card, it's treated differently from a surcharge. How our cash discount program works.
Dual pricing: two prices shown everywhere
Dual pricing displays both a cash price and a card price on menus, shelf tags and quotes, and on the terminal at checkout. It's common in restaurants, auto shops and convenience stores. How dual pricing works.
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Why Texas is different
Texas Business & Commerce Code chapter 604A has long restricted surcharges on credit card purchases, while expressly allowing discounts for paying cash. Litigation over no-surcharge laws, including a 2017 U.S. Supreme Court decision about New York's law and later federal court cases involving Texas's statute, has left the picture unsettled, and published sources disagree about what is allowed today. Because of that uncertainty, Cedarline sets up cash discount and dual pricing programs for Texas merchants and does not set up credit card surcharge programs.
Getting the details right
Whichever program you choose, disclosure matters. Signs at the entrance and register, consistent prices on menus and tags, and receipts that clearly show the discount or both prices are what keep a program clear for customers. Card networks' rules also change from time to time.
Not legal advice
This article is general information, not legal advice. If you have specific questions about pricing programs in your business, talk with a Texas attorney.
General information only, not legal, tax or financial advice. Rates and rules change; confirm current details before acting.