New Credit Card Surcharge Law Takes Effect
The NYC Hospitality Alliance previously informed you in this “industry alert” of the rules about credit card surcharges and how some processing companies have falsely claimed that restaurants (and other businesses) may list the cash price of menu items and charge a fee to customers when they pay with a credit card, calling it a “cash discount program,” “non-cash adjustment fee,” and the like. Applying fees in this manner is prohibited. However, to make the credit card surcharge rules even clearer, Governor Hochul signed a new law to that went into effect Sunday, February 11th, 2024.
The law does the following:
- Limits credit card surcharges to the amount charged to the business by the credit card company.
- Requires businesses to post before checkout:
- the total price of an item or service inclusive of the credit card surcharge; or
- a two-tiered pricing option, which requires the credit card price to be posted alongside the cash price.
The following practices and examples comply with the law’s credit card surcharge notice requirements. See the Department’s Credit Card Surcharge Guidance Document and educational video for additional examples:
DO:
- The business lists the higher credit card price next to a lower cash price.
- The business lists the credit card price for items and services, then lets customers know they will receive a discount for using cash.
- The business changes all prices to the credit card price.
DON’T:
- The business posts a sign on the door and at the register stating an additional 3.9 percent surcharge will apply for credit card purchases.
- “This business has a 4 percent cash discount incentive built into all pricing. Any purchases made with a credit or debit card will not receive the cash discount and an adjustment in cost will be displayed on your receipt.”
- A convenience fee, service fee, administration fee, non-cash adjustment, technology fee, processing fee, etc., is charged to credit card users and added as a separate line item on a customer receipt.
- The price tag of an item shows “$10.00, + 4 percent if paying with a credit card.”
NOTE: This law does not apply to debit cards.
Read Governor Hochul’s press release here.
Read the alert from Fox Rothschild LLP here.