New NY law mandates more transparency in credit card surcharges

A new law taking effect Sunday will require businesses in New York to clearly post the cost of purchasing items with a credit card, including any surcharges, to customers before checkout.

The law, signed by Governor Kathy Hochul in December, also prevents businesses from charging credit card surcharges that exceed those charged by processing companies.

Businesses can choose to either display only the higher credit card value for the products or services they sell or list both the credit card value and the lower cash value for the items.

The new disclosure requirements “will ensure that individuals can be confident that there will not be surprise surcharges on their purchases,” Ms. Hochul said in a statement this week.

“Transparency is key in building trust between businesses and communities, and patrons will now be empowered to budget accordingly,” he said.

In New Jersey, Governor Philip D. Murphy signed similar legislation last year, requiring merchants to inform consumers prior to checkout of the amount of any credit card surcharges that will be applied. It also prevented merchants from charging consumers more than the processing fee paid by the businesses.

A national law prohibiting merchants from charging consumers extra fees for credit card purchases expired four decades ago. Since then, many businesses have come to rely on so-called convenience fees to offset the fees charged by credit card processing companies.

State Senator Jeremy Cooney said in a statement that the law requiring disclosure “helps consumers better understand the total cost of the products they purchase”.

However, businesses were already required — by the state and by companies like Visa and MasterCard — to display credit card surcharge amounts at the entrance to their stores and at the point of sale, said Youssef Mubarez, director of public relations for Yemeni American. Traders association.

“They are making traders look like enemies by calling it ‘hidden fees’ when they are not,” Mr Mubarez said. “The only thing they’re trying to do is save money so they can keep their business alive.”

Mr. Mubarez, whose family has owned a deli in Times Square for decades and who owns a point-of-sale and service company, said limiting the surcharge amount in line with the processing fee is a good idea.

However, he said the new rules on displaying prices would increase the work for already stressed small business owners. In recent weeks, Mr. Mubarez said he has had to send his staff out to help customers reprice items, using a price gun that can print different cash and credit amounts for purchases. Is.

Additionally, some of the state’s rules — such as it being illegal now to sign a register informing consumers about blanket surcharges applied to all products — run contrary to the guidelines of credit card processing companies, said the merchants with whom he works. Does said, confusing some of them.

“They make these laws thinking about big businesses and leave small businesses to decide what to do,” he said.