This Holiday Season, Using Your Credit Card Should Not Cost More But Using Cash Could Save You Some Dough
Businesses Must Post Their Credit or Debit Card Pricing If It’s Higher Than Their Cash Price
As part of its seven-part consumer alert holiday series, the New York State Division of Consumer Protection is reminding consumers that credit card surcharges are prohibited in New York State. Businesses are not allowed to advertise a price and add a surcharge at the point of sale when a consumer elects to pay with a credit card. Instead, businesses are required to inform consumers of the higher credit card price for a product or service by posting the higher price. Businesses are also able to offer a discount to consumers who pay in cash.
New Yorkers using debit cards do not enjoy the same protections as those using credit cards. A surcharge or higher fee for the use of a debit card is permitted but must be accompanied by clear disclosure at the advertised street signage or prominent placement in the retail location.
“Many consumers and businesses are confused when it comes to surcharges in the marketplace,” said Secretary of State Rossana Rosado, who oversees the New York State Division of Consumer Protection. “New York businesses must advertise accurate prices. A business may offer a discount if consumers pay in cash, but cannot charge more at the register simply because a consumer uses their credit card.”
The following illustrates common New York consumer transactions:
Credit Card Requirements
Debit Card Requirements
|Percentage Fee: Tabitha goes into Tavern T for a meal. She sees on the menu a sign that says, “if you use a credit or debit card, you will incur a 5% fee.”||Violation||Compliant|
|Additional Charge: Tim heads to a new food truck parked on the corner near his office and orders a delicious lunch. When he goes to use his debit card, the operator tells him there will be an additional $2 added because he is using his debit card.||Violation||Violation|
|Listed Itemized Price Scheme: Jane goes into Shoe Store S, “The first price listed is if you use a credit card or debit card for your purchase. The second price is for cash.”||Compliant||Compliant|
|Flat Fee Notice: Kevin goes into his corner store for some groceries. A sign at the register says, “$5 fee for credit or debit card sales.”||Violation||Compliant|
|Cash Discount: Sophia goes into her florist. A sign at the register says, “$3 discount for all cash purchases.”||Compliant||Compliant|
|Post Purchase Fee: Frank goes into Restaurant R for an enjoyable meal. When he gets the check, he notices a “services fee” that was added when he said he was paying with his credit card or debit card.||Violation||Violation|
|Pay at the Pump: Violet stops to fill her tank up with gas. The per gallon price is listed – and is the same as the price on the sign she saw when she drove in. There is also a discounted price per gallon listed if Violet chooses to pay with cash inside the store.||Compliant||Compliant|
|Percentage Fee Notice: At the end of Alex’s medical appointment, she sees a sign that says, “3% fee for all credit and debit card transactions.”||Violation||Compliant|
|Discounted Product: John stops at the gas station to fill up. A sign at the pump says, “free cup of coffee with all cash sales.”||Compliant||Compliant|
|Percentage Discount: A supermarket banner at the door reads “3% discount for all purchases using cash.”||Compliant||Complaint|
In New York State, the New York State Attorney General has authority to enforce these laws and the Division of Consumer Protection is charged with assisting aggrieved consumers in the marketplace. When issues arise with New York State merchants charging additional fees improperly, consumers are encouraged to:
- File a complaint with DCP to seek return of any fees paid to a New York State merchant.
- File a complaint with the Attorney General to enforce the law against a specific merchant you believe to have violated the law.
Consumers can best support their complaints by submitting evidence of noncompliance, which may include pictures of the advertised price and fees, receipts with fees assessed, merchant’s location details, etc.
The New York State Division of Consumer Protection provides voluntary mediation, between a consumer and business, when a consumer has been unsuccessful at reaching a resolution on their own. The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumerprotection. To view consumer alerts, consumers can visit https://www.dos.ny.gov/about/newsroom.html. The Division can also be reached via Twitter at @NYSConsumer or Facebook at www.facebook.com/nysconsumer.