GET DAILY REPORT FREE
Louisiana’s Act 751, which took effect Aug. 1, bans merchants from adding surcharges specifically to debit-card transactions, while still allowing retailers to add fees to credit-card purchases, Louisiana Illuminator reports.
Supporters of the law say it protects consumers from unexpected debit card surcharges, but critics argue that it does not address the underlying fees that banks and payment networks such as Visa and Mastercard charge businesses for processing card transactions.
The law reinforces a federal prohibition on debit card surcharges that has been in place since 2010, when the Dodd-Frank Act also capped certain fees charged to businesses for debit transactions. Despite these limits, business owners say card processing fees can still be costly, particularly for small grocery and convenience stores with narrow profit margins.
Some businesses choose to raise their prices across the board instead of adding a separate card surcharge, which can result in consumers paying more while card companies continue collecting percentage-based fees.
The new Louisiana law gives consumers the ability to sue businesses for repeated violations and gives the state attorney general authority to enforce the ban through civil penalties. Critics worry that the law could shift costs onto consumers and small businesses without addressing the fees charged by banks and card networks.
Some lawmakers have even said they plan to pursue legislation next year aimed at addressing the underlying card fees and protecting both consumers and businesses.
