I ate at a Croatian restaurant where I had the option to pay with cash with euros or pay with my credit card.

If I chose to pay with cash, I would be given a 10% discount.

As I have a VISA credit card issued in another EU country, this discount seems to be against the law.

According to https://europa.eu/youreurope/business/finance-funding/making-receiving-payments/electronic-cash-payments/index_en.htm :

Card surcharges are not allowed

You're not allowed to charge your customers extra for using a credit or debit card. This applies to all card purchases (in shops and online) made throughout the EU.

So, is it a legal loophole to give discounts for paying with cash instead of adding a surcharge for paying with a credit card?

Or is this actually illegal?

  • @abelenky Note that the link is referring to U.S. law on the subject. Also FYI Croatia joined the European Union in 2013 and adopted the euro on 1 January 2023.
    – ohwilleke
    Jul 6 at 22:20
  • Yes, this hack was used for decades by businesses all over the USA, because credit card merchant agreements prohibited surcharging for credit (but they had no standing to prevent discounting for cash). Jul 7 at 4:13

1 Answer 1


Yes, its legal

Economically, there is no difference between a cash discount and a card surcharge; legally, there is. That’s because the law prohibits charging more than the advertised price for a given payment method but doesn’t prohibit charging less.

Of course, it’s likely there is some illegality here but it’s not against the customer. A business doesn't give a 10% discount to avoid paying a 1-2% fee. They do it because they are not reporting (some of) their cash sales to the tax authorities and are therefore saving the 25% VAT and 18% company tax.

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