HB 3619

84(R) - 2015
House Investments & Financial Services
House Investments & Financial Services
Investment & Financial Services

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral


Giovanni Capriglione

Bill Caption

Relating to a surcharge imposed for the use of a debit card or stored value card; providing a civil penalty.

Fiscal Notes

A fiscal note dated April 16, 2015 anticipates no significant fiscal implication to the State or to units of local government.

Bill Analysis

House Bill 3619 would amend the Finance Code and the Business & Commerce Code to create a civil penalty for merchants that knowingly impose a surcharge on a sale when the purchase is made using a debit card or a stored value card to pay.

In the case the attorney general would believe a person has violated the prohibition of imposing such surcharge, the attorney general would send the person a warning letter explaining how to be compliant with this prohibition. The civil penalty would not exceed $250 for each instance of a violation happening after the reception of the letter by the person.

The attorney general could seek to recover reasonable expenses incurred in obtaining civil penalties.

Vote Recommendation Notes

Under current law, merchants cannot impose a surcharge on a sale when and because a debit card or a stored-value card is used for payment. House Bill 3619 would add a civil penalty for merchants who continue to violate current law after receiving a notification from the Attorney General requiring them to stop and explaining what the current law is.

Because the penalty created by House Bill 3619 is a civil penalty and not a criminal one, and it will basically serve to enforce already existing law, we will remain neutral on House Bill 3619.

That being said, it bears reminding that merchants are usually charged to cover the cost of the interchange fee paid between banks for the acceptance of card-based transactions when a customer uses a credit card or even a debit card in some cases. Stored-value card transactions may also represent a cost for a merchant.

It is important to keep in mind that a merchant has no interest in charging a surcharge to a customer that is not necessary for the merchant to cover the cost of a transaction: a customer is not forced to make a purchase if the customer is not happy with the cost of the purchase. It is normal that a merchant would want to cover the cost of a transaction by passing it to the customer.

What are the consequences, for a merchant, of a prohibition to add a surcharge to cover the cost of a transaction? The merchant has two choices. He can either stop accepting the means of payment for which the merchant cannot recover the cost of a transaction, or the merchant can pass the cost not just to the customer that chooses to use this specific means of payment (since this is prohibited by law), but to all customers by increasing prices of goods or services sold. In both cases, customers, instead of being protected, the usual goal of such prohibitions, are those who lose the most. 

Customers are free to choose their means of payment and whether to accept or refuse to purchase goods or services when a surcharge is added by a merchant. Merchants should be free to ask for a surcharge if they want to cover costs of some transactions, and let it to their customers to make the final decision to accept the surcharge by agreeing to make the purchase, or not. Government should not be the entity making these decisions for customers and merchants. This is not the role of a limited government and this goes against the free market system.

We would prefer to see legislation that, rather than enforce the current law, remove altogether the prohibition on transaction fee surcharges. 

Organizations Supporting

Credit Union Coalition of Texas
Independent Bankers Association of Texas