Businesses in New York must clearly state the higher credit card price of an item and limit their surcharge amounts after an updated law goes into effect Sunday.
The updated credit card surcharge law was signed by Gov. Kathy Hochul in December and will go into effect Sunday, Feb. 11.
“New Yorkers should never have to deal with hidden credit card costs, and this law will ensure individuals can trust that their purchases will not result in surprise surcharges,” Hochul said Tuesday. “Transparency is crucial in building trust between businesses and communities and now patrons will be empowered to budget accordingly.”
How the updated law clarifies NY credit card surcharges
In a letter sent to local government leaders last month, the New York Department of State’s Division of Consumer Protection (DCP) said consumer complaints about the number of businesses tacking on surcharges at the point of sale have been consistent, with typical surcharges ranging from 3-5%.
Starting Sunday, the updates, which don’t apply to debit cards, look to clarify credit card surcharge pricing for consumers by:
- Requiring businesses to post the total price of an item or service, including the credit card surcharge, or a two-tiered pricing option including both the credit card and cash price before checkout.
- Limiting credit card surcharges to the amount charged to the business by the credit card company.
Local governments are also now able to enforce the law, according to the DCP’s letter.
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What businesses can and can’t do
Certain practices are illegal when it comes to businesses notifying their customers about credit card surcharges.
Here’s what businesses can do:
- Can list the higher credit card price next to a lower cash price
- Can list the credit card price for items and services, then let customers know they will receive a discount for using cash
- Can change all prices to the credit card price
And here’s what businesses can’t do:
- Can’t put signs on their wall or at the register notifying a fee is applied to all credit card sales
- Can’t advertise that all prices include a cash discount that doesn’t apply to credit card purchases
- Can’t charge separate line items like convenience fees, service fees, administration fees, non-cash adjustments, technology fees or processing fees to credit card users on the customer’s receipt
- Can’t include a credit card surcharge warning on the price tag or menu
Those who violate the law could receive fines up to $500 per violation.
If consumers experience any issues related to credit card pricing at the register, the DCP recommends customers either file a complaint with the DCP to receive a refund of any excess fees paid or file a complaint with the New York Attorney General or participating local governments for enforcement of a business you believe violated the law.
Emily Barnes is the New York State Team consumer advocate reporter for the USA TODAY Network. Contact Barnes at [email protected] or on Twitter @byemilybarnes.
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