In December of 2023, New York Gov. Kathy Hochul signed a law making the popular ‘Non-Cash Adjustment’ program illegal. Her actions are to clarify the results of a lawsuit that was settled between a group of merchants and NYS.

In January of 2019, a long running lawsuit was settled allowing merchants to add a fee or surcharge when a card is used for payment. A major part of this settlement has been overlooked and is now catching up to the industry. The settlement specifically states that both card price and cash price, or the higher card price only, must be displayed.

Most merchants have been using the ‘Non-cash Adjustment’ program where a fee is added to the total, which essentially is a surcharge. Her new law also clarified that businesses may not profit from the surcharge.

By prohibiting merchants from charging more than the processing company charges, it eliminates the possibility of the merchant profiting from a surcharge.

The new law, effective next month, also requires merchants to “clearly and conspicuously post the total price for using a credit card” in such a transaction, including the surcharge, according to the text of the bill.

The Governor promoted the law in a Dec. 13 press release as a way to provide New Yorkers with more consumer protection and increase their purchasing power.


Dual Pricing Not Affected


The New York law doesn’t prohibit sellers from using a dual pricing system. “Businesses in New York are permitted to offer two-tiered pricing systems in which the credit card price for certain sales transactions is posted alongside the cash price,” the governor’s release said.

“By requiring businesses to post the highest price that a consumer might pay, this legislation helps to promote transparency and ensure that consumers are informed about their purchases.”

According to a recent article in Payments Dive, New York’s effort to increase transparency with pricing aligns with similar moves at the federal level to eliminate junk fees and hidden fees, said Kristen Larson, an attorney at the law firm Ballard Spahr who specializes in payments. She noted the Consumer Financial Protection Bureau’s battle against such fees under the Biden Administration.

“We’ve seen a lot of pressure at the federal level regarding direct pricing, where they’re worried that consumers don’t know what the cost of services and products they’re buying because they get to the checkout and there’s increased fees,” said Kristen Larson, an of counsel attorney with the law firm Ballard Spahr in Minneapolis. “I think New York believes that it’s clearing up that confusion.”

We have also received the same message from the card brands. Visa CEO Ryan McInerney stated that “It’s not a great customer experience,” while talking about merchant surcharges, while speaking on an earnings webcast.

Bottom line: If you are still adding a surcharge, fee, line item, or anything else without showing both prices, you could be subject to a fine from NYS and the card brands. Our compliant Dual Pricing Program is the easy solution to remove your fees for accepting card payments.

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