Last month, New York Governor Kathy Hochul signed into law Assembly Bill 2672, which both prohibits sellers from charging a credit card surcharge greater than what they are charged by the credit card company and requires sellers to clearly post the price of the credit card surcharge. The law will take effect on February 11, 2024.
Specifically, the law provides that any seller in any sales transaction imposing a surcharge on a customer using a credit card shall clearly and conspicuously post the total price for using a credit card in such a transaction, inclusive of the surcharge. The law further provides that any surcharge may not exceed the amount charged to the business by the credit card company for such credit card use. The final sales price of any such transaction, inclusive of such surcharge, shall not amount to a price greater than the posted price.
Notably, the new law does not prohibit dual pricing. A seller is permitted to post a “two-tier pricing system” in which the credit card price, inclusive of the surcharge, is posted alongside the cash price.
Merchants who violate the law could face a civil penalty of up to $500 per violation.
Credit card surcharges have come under attack by the card networks. For example, in April 2023, Visa announced that it reduced the maximum amount retailers can charge for using their cards from 4% to 3%. More recently, Visa informed its clients that violations of its surcharge standards could result in fines of up to $1 million.