States widen scrutiny of checkout fees and card charges

State lawmakers are increasing pressure on fees charged at checkout, with proposals spanning card surcharges, mandatory price disclosure and interchange fees. An analysis by attorneys with the Global Advertising Lawyers Alliance said the 2025-2026 legislative cycle produced a broad set of state measures aimed at pricing transparency and payment practices, even though many did not become law.

The measures point to a wider compliance burden for retailers, card networks, financial institutions and payment processors. GALA attorneys said the proposals show models that may return in later sessions and could create different obligations across states for the same checkout practices.

Surcharges draw state attention

Several states considered limits on credit and debit card surcharges, which are added by some merchants when customers use certain payment cards. New Jersey lawmakers considered AB4807, a bill that would bar surcharging altogether.

Georgia’s HB700 and Oklahoma’s SB2132 took a different approach by tying permitted surcharge amounts to merchants’ actual payment-processing costs. That structure would limit the surcharge to the cost the merchant incurs to accept the card, rather than allowing a broader fee set at the merchant’s discretion.

Illinois and Minnesota considered allowing surcharges only where consumers also had access to another payment method that did not carry the added charge. That type of rule would leave merchants with room to surcharge, but only if customers could avoid the fee by choosing a different payment option.

Louisiana enacted a narrower prohibition focused on debit cards. Gov. Jeff Landry signed SB254, which bars retail businesses from imposing surcharges on consumers who pay with debit cards. The law takes effect Aug. 1 and creates a private right of action for consumers harmed by violations, adding potential civil litigation exposure for merchants that fail to comply.

Mandatory fee disclosure gains traction

States also targeted so-called junk fees through rules requiring businesses to disclose the full mandatory cost of a transaction before payment. The common policy objective is to prevent businesses from advertising a lower headline price and adding required charges later in the purchase process.

Illinois considered a Junk Fee Prevention Act that would amend the state’s Consumer Fraud and Deceptive Business Practices Act to prohibit advertising or offering a price that excludes mandatory fees or surcharges. Tennessee considered legislation requiring clear and conspicuous disclosure of total prices before payment. New York lawmakers proposed a similar Junk Fee Prevention Act that would define total price to include mandatory fees.

Other proposals would place all-in pricing requirements inside state unfair or deceptive acts or practices laws, known as UDAP laws. Measures in West Virginia and New York would treat a failure to disclose a total price, including mandatory fees, as a deceptive pricing practice.

Interchange rules face federal limits

The most contested area involves interchange fees, according to GALA’s analysis. Interchange fees are paid within card payment systems and are generally associated with the cost of processing card transactions. State efforts to regulate them can collide with federal banking rules and litigation over preemption.

Colorado lawmakers advanced SB134, which would have prohibited payment card networks from charging interchange fees on the sales-tax portion of transactions. Gov. Jared Polis vetoed the measure on June 3, citing legal risks that included federal preemption concerns tied to actions by the Office of the Comptroller of the Currency and the National Credit Union Administration, as well as litigation over a similar Illinois law.

Illinois enacted its Interchange Fee Prohibition Act in 2024 to restrict interchange fees on tax and gratuity portions of transactions. Federal litigation has substantially blocked the statute. After the Seventh Circuit in May vacated an earlier district court judgment and ordered reconsideration in light of an OCC interim final rule and preemption order, U.S. District Judge Virginia Kendall issued a new ruling on June 1.

Kendall permanently barred Illinois from enforcing the interchange restriction against national banks, certain out-of-state state-chartered banks covered by the Riegle-Neal Act, federal savings associations and payment card networks. The court concluded that the OCC’s actions had materially altered the federal preemption analysis.

The state activity leaves merchants and payment companies facing a patchwork risk: a fee practice allowed in one state may require added disclosure, invite private lawsuits or face direct restriction in another.

This story draws on original reporting from PYMNTS.