As Mitchell Katz, spokesman for the Federal Trade Commission, said in May of 2011: The Dodd-Frank law prohibits a payment card network such as Visa “from inhibiting the ability of anyone to provide a discount for payment by cash, checks, debit cards, or credit cards.” “Neither surcharging, nor a cash discount is illegal.”
As part of your regular standard list product pricing, a small service fee (much like an automatic service gratuity applied in some dining locations) is assessed on ALL sales regardless of how payment is made including checks, cash, credit-debit cards, gift cards, etc.
As stated in the Durbin Amendment (part of the 2010 Dodd-Frank law) businesses are permitted to offer a discount to customers as an incentive and to encourage customers to pay by alternative methods other than a credit/debit cards including either checks or cash in order to automatically receive a discount which is applied at the time of sale.
Under the Durbin Amendment there is no distinction between using a PIN or not and if the card is a bank debit card it is always considered a debit transaction – with or without a PIN number and never would such a transaction be considered a credit sale.
Credit Card Industry
As of January 27, 2013 several Card industry changes went into effect with regards to the credit card company’s federal class action litigation settlement. The settlement requires Visa and MasterCard to change some rules for merchants who accept their cards, including allowing merchants to “offer discounts to customers who pay with payment forms less expensive than Bank Debit cards.”
This is not intended as legal advice and we encourage you to consult with your own legal counsel about these issues.