Cash Discount vs. Surcharge: What's Actually Legal in Louisiana Now

Processors have used "cash discount," "surcharge," "non-cash adjustment," and "dual pricing" as if they all meant the same thing for years. Since Act 751 took effect on August 1, the difference stopped being sales talk and started being the line between a legal program and an illegal one.

Here is the difference, in register math.

A surcharge adds. A cash discount subtracts.

Surcharge: the menu says $10. The customer pays with a card and the register charges $10.40. The price went up because of the card.

Cash discount: the posted regular price is $10.40. A customer who pays cash pays $10. The card customer pays the posted price. Nothing was added, a discount was given.

Those two registers can collect the exact same money, and one of them can be illegal in Louisiana while the other is fine. That feels like a technicality until you understand what each one claims: a surcharge penalizes the card, a cash discount rewards the cash. Louisiana law now specifically prohibits penalizing debit cards, and card brand rules restricted debit surcharges long before the state got involved.

The three tests we run on any program

When a merchant asks us to review their current setup, we look at three things:

1. What price is posted? In a real cash discount program, the posted price is the regular price and it is what a card customer pays. If your shelf tag or menu shows the low price and the register grows it at checkout, the program is add-on math, and add-on math on a debit card is exactly what Act 751 prohibits.
2. What does the receipt say? The receipt should show the regular price and a discount line for cash customers. Receipts that show a "fee," "adjustment," or "surcharge" line on card payments tell a different story than the signage does, and mismatched stories are how complaints start.
3. What does the terminal do on a debit card? This is the test that catches most bad programs. Many were configured once, years ago, to treat every card the same. Ring up a debit sale and watch what happens.

"But my processor said it was compliant"

We hear this weekly, and we believe you. Plenty of merchants were sold a program with a compliance promise attached and no details behind it. The promise is not the protection. The configuration is.

This is also why we are careful about our own claims. Compliance is not a sticker you put on a terminal, it is how the whole setup works together: pricing, signage, receipts, and POS behavior. That is exactly what we set up, and what our Compliance Guarantee stands behind.

Where to go from here

If you want the law itself explained in plain English, we maintain act751.com for exactly that purpose, and it is free.

If you want your setup checked or fixed, that is our day job. We are local, we set up cash discount programs on Clover across South Louisiana and the Gulf Coast, and we would rather spend twenty minutes checking your register now than help you clean up a complaint later. Get in touch.