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New York Enacts Law Prohibiting Credit Card Surcharges Without Proper Disclosure 

Starting on February 11, 2024, a new law take effect for New York State businesses charging an additional fee to customers paying with a credit card. As stated in the newly amended §518 of the New York General Business Law, merchants will be expressly permitted to impose a surcharge in any transaction in which a consumer elects to pay using a credit card, so long as the merchant:

  1. Clearly and conspicuously post the highest price that the consumers would have to pay in connection with a purchase using a credit card, as well as the alternative price offered to consumers electing to pay by other means (i.e., cash, check, or debit card) and
  2. Any surcharge imposed on consumer purchases must not exceed the amount charged by the credit card processor. It should simply pass through the merchant to the consumer, without profit to the merchant.

Failure to comply with the new surcharge disclosure requirements could result in a civil penalty of $500 per violation, which may be enforced concurrently by the director or commissioner of a municipal consumer affairs office, or by a town attorney, city corporation counsel, or other lawful designee of a municipality or local government.

This new law is aimed at alleviating numerous complaints from consumers from across the state regarding the number of restaurants, stores, service providers, medical professionals, and other business entities charging a surcharge without informing the consumer of the higher price before they reach the point of sale (i.e. the cash register).  As stated by New York Assemblymember Amy Paulin, “the legislation is about transparency, fairness, and preventing consumers from being misled when making purchases using credit cards.”

For additional information and examples of compliant disclosures, please visit the New York Department of State Consumer Protection website here.

This article was the basis for “How New York’s New Credit Card Law Will Affect Hudson Valley Businesses,” as published in Chronogram Online dated March 5, 2024.  Click here to view the full article as it appears in Chronogram.

This is not to be considered legal advice.  Please reach out to an attorney for information regarding your specific situation.

Elisha Rapp is an Associate concentrating in business law.
She can be reached by phone at 845-764-9656 or by email.

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