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Act 751, which takes effect Saturday, August 1, prohibits a restaurant or any merchant from imposing any surcharge on a transaction processed as a debit card. The Act defines a surcharge as “any additional amount of money” imposed on the customer who uses a debit card and expressly provides that a restaurant or any merchant “shall not impose a surcharge” on a cardholder who uses a debit card. The statute contains no language authorizing a restaurant or any merchant to recover its actual debit card processing costs or establishing a permissible percentage that may be passed through to the consumer.

As a result, the LRA interprets Act 751 to prohibit restaurants from assessing a debit card surcharge even if the amount charged merely offsets the restaurant’s or merchant’s actual processing expense. A fee equal to the restaurant’s or merchant’s debit card processing cost would still constitute an “additional amount of money” imposed because the customer elected to pay with a debit card, thereby falling within the statutory definition of a prohibited surcharge.

Moving forward, it will be critical to explain this new law to customer-facing staff and emphasize the importance of distinguishing credit cards from debit cards before processing a transaction. We also strongly recommend talking to your payment processor to make sure your point-of-sale system is compliant and capable of distinguishing debit and credit transactions.

If you have any questions, or if your business experiences any enforcement relating to Act 751, please contact Will DuBos at the LRA Office. Sharing your experience with the LRA may prove helpful in tweaking the law next session.

Will J. DuBos
Managing Director of Government and Public Affairs
Louisiana Restaurant Association
Office: (504) 454-2663