A state law legalizing credit card surcharges went into effect Sunday, allowing business owners to collect a small fee from customers who opt to use a credit card at the register.
The new law limits credit card surcharges to the amount businesses are charged by the credit card company. Businesses are required to include the surcharge in the listed price, although they can also list a separate “cash price.” Companies can also choose to charge everyone the “credit card price,” effectively allowing them to collect credit card surcharges from customers who use other payment methods.
Credit card surcharges were flat-out prohibited under the prior law, although business owners were permitted to offer discounts to customers who paid in cash.
Gov. Kathy Hochul billed the legislation, which she signed in December, as a “transparency” measure that would “clarify” the law surrounding credit card fees.
“New Yorkers should never have to deal with hidden credit card costs, and this law will ensure individuals can trust that their purchases will not result in surprise surcharges,” Gov. Hochul said in a statement. “Transparency is crucial in building trust between businesses and communities, and now patrons will be empowered to budget accordingly.”
The legislation also lowers penalties for business owners who break the rules. Violations under the previous law were considered criminal misdemeanors punishable by a $500 fine, a year in prison or both. The new law decriminalizes violations, instead imposing a civil penalty of $500 for each illegal charge.
The new law doesn’t apply to debit cards.