New York’s New Credit Surcharge Law Takes Effect

The war on drip pricing continues. New York’s new credit surcharge law is now in effect requiring businesses to provide important pricing disclosures. The law amends and clarifies New York’s existing credit card surcharge law, General Business Law Section 518. Key requirements are outlined below.

  1. Total Price: Sellers in any sales transactions that impose a credit card surcharge must clearly and conspicuously post the total credit card price, inclusive of the price of the surcharge prior to payment. Sellers may elect to post both the credit card price and the lesser cash price, or just the credit card price, but they cannot post only the cash price alongside a disclosure of the credit card fee absent a disclosure of the total higher cost. The total amount charged to the customer cannot exceed the maximum price that was posted by the seller.
  2. Maximum Fee: Any credit card surcharge applied to a sale must not exceed the amount of the surcharge charged to the business by the credit card company. That is, sellers cannot inflate the credit card surcharge beyond what they are actually being charged.

The new law does not differentiate between brick and mortar establishments or ecommerce-based businesses. “Seller” to whom the law is directed is defined broadly to mean “any person who honors credit cards or debit cards which may be used to purchase or lease property or services.” As such, e-commerce retailers that sell into New York should also assess the requirements of the new law and ensure compliance where necessary. 

Any seller that violates the new law may face civil penalties of up to $500 per violation. The law can be enforced by the state attorney general as well as local New York municipalities.

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