United States: New York Officially Eliminates Ban On Surcharges

Gunnar Larson g at xny.io
Thu Dec 21 07:21:37 PST 2023


United States: New York Officially Eliminates Ban On Surcharges
20 December 2023
by Johnathan Holbrook
Bass, Berry & Sims
View Johnathan Holbrook Biography on their website
This week, New York Governor Kathy Hochul signed into law Assembly Bill No.
2672, which amends Section 518 of the New York General Business Law. The
law previously prohibited merchants from imposing a surcharge on customers
who elect to pay for goods or services using a credit card. As amended,
merchants now are expressly permitted to impose a surcharge in any
transaction in which a customer elects to pay using a credit card so long
as the merchant does both of the following:

Clearly and conspicuously posts the total price for an item if paying by
credit card (i.e., the sticker price must reflect the total price for the
item plus the applicable surcharge imposed if the customer pays using a
credit card).
Does not impose a surcharge in excess of the amount of the surcharge
charged to the merchant by the applicable credit card company for
processing a card transaction.
This amendment codifies the decision by the Court of Appeals of New York in
Expressions Hair Design v. Schneiderman, 117 N.E.3d 730, 737 (N.Y. 2018),
in which the court held that a higher price charged to customers paying by
credit card must be posted in total "dollars-and-cents" form, rather than
presented as a separate surcharge. This law explicitly allows a merchant to
offer a "two-tier pricing system," in which a merchant posts two different
prices for a good or service: one for the credit card price (inclusive of
any surcharge) and one for the cash price (which excludes the surcharge).
As a result of this structure, merchants often raise prices on all goods
and services to include the applicable surcharge, but offer a discount
equal to the surcharge amount if the customer pays using cash, check, or
debit card.
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