Should I let a restaurant apply a credit card surcharge and later contest it with the credit card company?

Q: More and more restaurants and businesses now add a “convenience” fee when customers use credit cards. I thought this was not permitted in Texas. An internet search indicates the convenience charges are illegal; however, a recent court ruling seems to say the law is unenforceable. What is the law in Texas? What do you recommend doing when a company charges more for using a credit card? Should I let them apply the surcharge and later contest it with the credit card company?

A: Chapter 604A of the Business and Commerce Code does, in fact, make it illegal for a business to impose a surcharge on customers who use credit cards. There is a civil penalty of up to $500 for each violation.

Under the law, only state and local governments and some private schools can impose a surcharge.

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However, as you mention, a federal court in Texas ruled in 2018 that the Texas law is unconstitutional as it relates to surcharges on credit card purchases.

A year later, the Texas attorney general issued an opinion stating that the federal court's ruling applied only to the parties to the lawsuit, and the Texas statute is still enforceable in some contexts.

You are correct that many businesses now charge extra when you use a credit card. Some of these businesses have likely imposed the extra fee without doing any legal research, but other, larger companies have presumably asked their lawyers for advice, and those lawyers have given the green light to add the surcharges.

I think that if a business charges more for using a credit card, you should pay in cash or with a check. Sometimes though, the convenience of using a credit card outweighs the surcharge, especially when the purchase is for a relatively small amount of money.

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Your idea of paying the surcharge and later contesting it is almost certainly going to be a giant waste of your time. I would not recommend taking this approach.

Note, there is no law in Texas that prohibits a business from offering a discount to customers who pay in cash.

Q: If you set up all your assets so that they are "payable on death," is there any need to probate your will just to get letters testamentary?

A: If all of the payable on death beneficiaries are alive, and there are no other assets in your estate that pass under your will, there will be no need to probate your will.

What often happens, though, is an account gets overlooked, and there will be an asset that doesn't pass to a named beneficiary automatically. And sometimes a beneficiary designated to receive a payable on death account will have died before you, and thus the designation will be ineffective.

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The information in this column is intended to provide a general understanding of the law, not legal advice. Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to: stateyourcase@lipmanpc.com.