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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Short answer: Texas statutes say a seller may not impose a surcharge on a customer who pays with a credit card, but a federal injunction has made the law’s enforceability uncertain. A restaurant’s clearly posted cash discount is treated differently from a card-user surcharge. Separately, payment-card fraud and terminal skimmers involve different duties and dispute procedures; neither issue automatically determines who absorbs a fraudulent charge.
What Texas law says about a restaurant credit-card surcharge
The statutory definition
Texas Business & Commerce Code §604A.001 defines a surcharge as an increase in the price of goods or services imposed on a buyer who pays with a credit, debit or stored-value card when the increase is not imposed on a buyer who pays by another method. The definition expressly excludes a discounted cash price.
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The prohibition and penalty
Section 604A.0021 states that, in a sale of goods or services, a seller may not impose a surcharge on a buyer using a credit card. Section 604A.003 authorizes a civil penalty of up to $500 for each knowing violation. The statute requires notice, and a seller that complies within 30 days after notice cures the violation under the statutory procedure.
Why enforceability is unsettled
The Texas State Law Library says, “It is unclear if the Texas law against credit card fees is enforceable due to a federal lawsuit.” In Rowell v. Paxton, 336 F. Supp. 3d 724 (W.D. Tex. 2018), a federal court permanently enjoined enforcement of parts of the surcharge law. That injunction is why the statutory text and practical enforcement do not line up cleanly. The library distinguishes cash discounts from surcharges and notes that the Texas attorney general accepts consumer complaints but does not file lawsuits for individual consumers.
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Consequently, a 3% or 4% line item is not automatically lawful merely because some restaurants use it, and it is not automatically resolved by quoting the statute alone. The restaurant’s price presentation, the wording of the charge and the current effect of the injunction all matter.
Why restaurants are considering card fees
Credit-card processing costs have become a larger operating expense for restaurants. The Texas Restaurant Association’s September 2024 economics report surveyed more than 50 Texas restaurant operators between October 22 and November 9, 2024. It reported that some operators were considering passing credit-card fees to customers beginning in 2025 because of financial strain, identifying swipe fees as a growing cost.
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Industry guidance is not the same as Texas law. A December 2022 guide from Monty & Ramirez LLP, published through the Texas Restaurant Association, advised restaurants considering a surcharge to notify card associations and their merchant-services provider, limit the charge to the restaurant’s effective processing rate and post notices at the entrance and point of sale. The guide stated a 4% ceiling and recommended showing the amount as a separate receipt line. It also said the material was general guidance, not legal advice.
A 2023 Texas legislative analysis for H.B. 3615 proposed repealing the existing surcharge section and authorizing a merchant to impose a surcharge only up to the cost of accepting credit cards, with specified disclosures and a receipt line item. The analysis listed September 1, 2023 as the proposed effective date. It is a bill analysis, not proof that the proposal became law; its enactment status must be verified before treating those rules as current.
Surcharge, cash discount and undisclosed fee: how they differ
| Practice | How the price is presented | Connection to card use | Receipt treatment | What the cited Texas materials establish |
|---|---|---|---|---|
| Credit-card surcharge | A higher price is imposed on the customer who pays by card. | The extra amount is conditioned on using a credit card. | The 2022 industry guide recommends a separate line. | Section 604A.0021 prohibits it, but Rowell v. Paxton makes enforceability uncertain. |
| Cash discount | The seller posts or quotes a regular price and gives a lower price to customers paying cash or another non-card method. | The discount is tied to the alternative payment method rather than an added charge to card users. | The receipt should reflect the price actually charged. | Section 604A.001 expressly excludes a discounted cash price from the definition of surcharge. |
| Undisclosed fee | The customer learns of an added amount only at or near checkout. | The sources do not establish a separate statewide rule classifying every undisclosed fee. | The customer can ask for an itemized receipt showing the amount. | Ask the restaurant to explain the charge and use the attorney general’s consumer-complaint process if the issue is not resolved. |
What to do when a restaurant bill includes a card-related charge
Check the menu, posted notices and receipt
- Look for language such as “credit-card surcharge,” “service fee,” or “cash discount” before paying.
- Compare the card price with any cash or other-payment price shown at the entrance, menu or point of sale.
- Request an itemized receipt and ask the manager which payment method triggers the amount and how it was calculated.
- Keep the receipt, a photograph of posted notices and the date, location and payment method.
Raise a dispute through the right channel
Start with the restaurant and your card issuer. If the restaurant will not explain or correct a charge, the Texas attorney general’s consumer-complaint process is an available reporting route; the Texas State Law Library cautions that the attorney general does not bring an individual lawsuit for a consumer. The statutory penalty and 30-day cure mechanism apply to knowing violations under §604A.003, but the federal injunction means a complaint is not a guaranteed outcome.
Who pays when the card transaction is fraudulent?
A surcharge dispute and a fraudulent transaction are separate questions. The cited Texas materials do not establish a universal rule making the diner, restaurant, card issuer or payment network automatically responsible for every fraudulent restaurant tab, and they do not provide a reliable statewide dollar total for Texas restaurant card-fraud losses.
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If you see a transaction you did not authorize, notify the card issuer promptly using the number on the card or the issuer’s official app, follow its fraud-dispute instructions and preserve the receipt and any communications with the restaurant. Whether a charge is reversed depends on the card type, issuer and network rules and the facts of the transaction—not on whether the restaurant displayed a surcharge.
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What a Texas restaurant should do after finding a card skimmer
A skimmer is a device criminals place on or in an electronic terminal that can unlawfully intercept electronic communications or data to commit fraud. The Texas Register’s November 14, 2025 proposed rules, implementing Senate Bill 2371 from the 89th Legislature, would require merchants to report discovered skimmers on electronic terminals to law enforcement and the Financial Crimes Intelligence Center (FCIC), cooperate with investigations and follow evidence-preservation and removal procedures. Because these were proposed rules, a restaurant should confirm the final rule and effective date before relying on them as operative requirements.
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- Stop using the affected terminal and restrict access to it.
- Do not discard, alter or dismantle the device or terminal in a way that could destroy evidence.
- Notify the appropriate law-enforcement agency and the FCIC as required by the final rule.
- Preserve the terminal, suspected skimmer, video, access logs, transaction records and relevant staff information.
- Cooperate with investigators and follow their instructions for documented removal and replacement.
- Alert the payment processor and review potentially exposed transactions so customers can be contacted through an appropriate channel.
What diners and operators should watch next
For diners, the practical distinction is whether the posted price is a cash discount or an added card charge, whether the amount was disclosed before payment and whether the receipt identifies it. For operators, any surcharge program must be evaluated against the current Texas statute, the federal injunction, card-network and processor requirements, and any enacted legislation or final skimmer rules. H.B. 3615 remains a proposal in the cited analysis, and the 2025 skimmer provisions were proposed rules rather than confirmed final requirements.
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