This week, New York’s new surcharging law went into effect, replacing the prior surcharge ban which had been attacked at the U.S. Supreme Court (as discussed here). The old law was simply a wholesale ban on credit card surcharges, although since being reinterpreted by the New York Court of Appeals in 2018, it has not been enforced categorically. The new statutory language appears to be an attempt to codify the Court of Appeals’ interpretation under which surcharge programs are
Continue Reading Sweeping Changes to Surcharging Practices in New York

The legality of surcharging keeps getting more confusing. Recent reports seem to indicate that New York’s law prohibiting surcharging was overturned. Unfortunately, that overstatement confuses the actual status of the statute.

As you may recall, the card brand rules allow merchants to add a fee on top of the regular price for goods and services, also known as a surcharge, if a consumer pays by credit card. The rules require merchants to follow certain conditions and requirements if they surcharge credit card transactions.
Continue Reading The Surcharge Muddle: NY Ban Law Survives Lawsuit

In March 2017, the United States Supreme Court issued its opinion in Expressions Hair Design v. Schneiderman, on a challenge to New York’s law prohibiting credit card surcharges. The Supreme Court held that the law restricts merchants’ speech by banning surcharges while allowing cash discounts—two similar business models that differ only by how a merchant’s pricing can be communicated to customers—and then sent the case back down for the lower court to determine whether this particular speech restriction is lawful or not. This case remains pending (the New York state court was consulted to interpret the state statute, and we are still awaiting its response), but other federal courts have already relied on this decision to invalidate equivalent laws in other states.
Continue Reading Texas Latest State to have Surcharge Ban Declared Unenforceable by Federal Courts

It’s hard to be a cash-only business, especially when businesses are expected as a matter of course to accept credit and debit cards. But processing fees can make merchants hesitant to sign up for transaction processing services, and many payment processors want to offer merchants the ability to pass processing costs through to the customer. There are several ways these programs can be structured, each subject to a different regulatory framework.
Continue Reading Surcharges, Convenience Fees, & Cash Discounts