NY Surcharge Rules for Businesses Accepting Card Payments

NY State Surcharge Law for Card Payments

Effective February, 2024 businesses must follow the new surcharge laws or face fines.

Below is a summary of the new laws passed in NY State regarding adding a fee or surcharge when a customer pays with a card.

Starting February 11, 2024, New York State has implemented a new law regarding credit card surcharges, requiring businesses to be more transparent about these additional fees. Here are the key points:

1. Disclosure Requirements: Businesses must clearly display the total price for using a credit card, inclusive of any surcharges, before the transaction is completed. This means the final price, including the surcharge, cannot exceed the posted price.

2. Surcharge Limits: The surcharge imposed by a business cannot exceed the amount charged to the business by the credit card company. This ensures that consumers are only charged the actual cost of processing the credit card payment.

3. Two-Tier Pricing System: The law allows for a dual pricing system, where both the credit card price (inclusive of the surcharge) and the cash price are posted. This provides consumers with the choice between paying a lower price with cash or a higher price with a credit card.

4. Penalties for Non-Compliance: Businesses that violate the law may face civil penalties of up to $500 per offense. Consumers can report violations to the Division of Consumer Protection or the Attorney General of New York State.

The intent of this law is to enhance transparency and ensure that consumers are fully informed about the costs associated with using credit cards, thus preventing surprise surcharges at checkout. If you need assistance with a compliant solution for your small business please contact us.

If you’re wondering about just adding a fee and calling it a non-cash adjustment, that is not compliant according to the new law.

The law explicitly requires that the total price, including any surcharges, be clearly posted before the transaction is completed, and that the surcharge cannot exceed the actual cost charged by the credit card company to the business.

Additionally, the law mandates that any price differences between cash and credit card payments must be clearly and conspicuously disclosed, either by showing the total price for using a credit card or by posting both the cash and credit card prices. Simply adding a fee and calling it a non-cash adjustment, without proper disclosure and adherence to the specific requirements, would be a violation of this law.

Violating these regulations can result in civil penalties of up to $500 per offense, and consumers have the right to report any non-compliant practices to the Division of Consumer Protection or the Attorney General of New York State.