The New York State Division of Consumer Protection has notified all municipal government officials that a new law amending and clarifying the state’s existing credit card surcharge law went into effect on Sunday.
The law, signed by Gov. Kathy Hochul in December, limits credit card surcharges to the amount charged to a business by a credit card company. It also requires businesses to post, before checkout, the total price of an item or service inclusive of the credit card surcharge, or a two-tiered pricing option that requires the credit card price to be posted alongside the cash price.
Local governments and the state attorney general have the authority to enforce the new law, which does not apply to debit card transactions. Violators will be liable for a civil penalty of up to $500 per violation.
The law “may be enforced concurrently by the director or commissioner of a municipal consumer affairs office, or by the town attorney, city corporation council, or other lawful designee of a municipality or local government,” according to a Jan. 22 notice from the State Department of State’s Division of Consumer Protection, and money collected will be retained by the municipality or local government.
“Consumers across New York have consistently complained about the number of restaurants, stores, service providers, medical professionals, and many other entities charging a surcharge at the point of sale when a consumer presents a credit card for payment,” reads the letter from Paula J. O’Brien-Soler, the Division of Consumer Protection’s director. Fees reported tend to range from 3 to 5 percent.
A statement issued by the governor’s office last week listed examples of proper and improper practices. Commercial businesses can list a higher credit card price next to a lower cash price, list the credit card price for goods and services and then let the customer know of a discount for using cash, or change all prices to the credit card price.
Businesses are not to post a sign on the door or at the register stating that an additional surcharge will apply to credit card purchases; charge credit card users a fee ascribed to things such as convenience, service, administration, non-cash, technology, or processing and add it as a separate line item on a customer receipt; promulgate a “cash discount incentive” policy in pricing that will not apply to credit card purchases, or advertise the cost of an item with an additional percentage if the customer is paying with a credit card.
Robert Connelly, the East Hampton Town attorney, did not return a call seeking comment.
