NEW YORK (WKBW) — You may have noticed that it's sometimes cheaper to pay with cash to avoid a credit card surcharge. That's what Jennifer Matyjakowski said she experienced recently.
"I went into a place and they actually told me they charge more for credit and they said if you can pay cash we prefer it," Matyjakowski said. "I ended up paying cash."
A new law that will amend New York State's existing credit card surcharge law will go into effect on February 11.
The law was signed by Governor Kathy Hochul on December 13, 2023.
The governor's office said it provides greater transparency and protections for consumers by:
- Limiting credit card surcharges to the amount charged to the business by the credit card company; and
- Requiring 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, which requires the credit card price to be posted alongside the cash price.
“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. Transparency is crucial in building trust between businesses and communities and now patrons will be empowered to budget accordingly.”
"This surcharge is not supposed to be a profit center. It's really just supposed to offset the cost of doing business or processing credit card transactions. That average is about 2.2% varies a little bit. But this is part of a larger war, I would say between merchants and card companies," Ted Rossman, Senior Industry Analyst at Bankrate, said. "The main options you have are to either vote with your feet and take your business elsewhere or pay with the optimal payment method. Like in my example, I like this pizza place. I just pay with cash now to save the processing fee."
You can find the guidance on the state's website here.
The following are examples provided by the governor's office that do and don't comply with the law’s credit card surcharge notice requirements:
DO:
- The business lists the higher credit card price next to a lower cash price.
- The business lists the credit card price for items and services, then lets customers know they will receive a discount for using cash.
- The business changes all prices to the credit card price.
DON’T:
- The business posts a sign on the door and at the register stating an additional 3.9 percent surcharge will apply for credit card purchases.
- “This business has a 4 percent cash discount incentive built into all pricing. Any purchases made with a credit or debit card will not receive the cash discount and an adjustment in cost will be displayed on your receipt.”
- A convenience fee, service fee, administration fee, non-cash adjustment, technology fee, processing fee, etc., is charged to credit card users and added as a separate line item on a customer receipt.
- The price tag of an item shows “$10.00, + 4 percent if paying with a credit card.”
The law does not apply to debit cards.
