In 1985, California passed a law (Civil Code section 1748.1) that prohibited merchants from adding a surcharge (an extra fee) when customers pay by credit card instead of cash. That law does allow merchants to give customers discounts for paying by cash, check, or debit card, as long as that discount is offered to all customers. The law was challenged by several businesses, and in January of 2018 a federal court held that the law could not be enforced as to the businesses which brought that case. (Italian Colors v. Becerra (9th Cir. 2018) 878 F.3d 1165.) The Attorney General will generally apply the Italian Colors decision to merchants that are similarly situated to the Italian Colors plaintiffs.
Merchants are still barred from misleading customers, such as by falsely advertising a lower price than they actually charge or hiding any differences between credit card, debit card, and cash prices, including by imposing surcharges “surreptitiously at the point of sale.” (Italian Colors, 878 F.3d at p. 1176.) If a merchant fails to clearly and prominently disclose—before you pay or seek to pay for an item—what it will charge for the item, including any additional fees, that may violate California laws prohibiting deceptive or false advertising. Be sure to check the cash register display and your receipt to make sure that the price you're being charged matches the advertised or posted price of an item (plus tax, if applicable).
If you believe a merchant is improperly charging customers, failing to disclose what it is charging, or otherwise engaging in false or misleading sales practices, you should file a complaint with the Attorney General's Office. The Office uses complaints to learn about misconduct. However, we cannot give legal advice or provide legal assistance to individuals.