Quick Summary:

• Surcharging credit cards is legal in New York with strict disclosure requirements
• Must display total price including surcharge before checkout (effective February 11, 2024)
• Surcharge cannot exceed merchant's actual processing costs
• Dual pricing systems allowed but highest price must be disclosed
• Violations subject to $500 penalty per incident

New York implemented comprehensive credit card surcharge reform in 2024 under Governor Kathy Hochul's consumer protection initiative. The state requires businesses to display the total price including any surcharges before customers reach checkout, preventing surprise fees that burden families. New York joins Nevada, New Jersey, and South Dakota as states that limit surcharges to actual processing costs, while adding unique transparency requirements that set it apart from other jurisdictions.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Consult with an attorney before implementing surcharge programs, as rules can change and vary by business type.

New York Credit Card Surcharge Laws

Quick Summary:

• Surcharging credit cards is legal in New York with strict disclosure requirements
• Must display total price including surcharge before checkout (effective February 11, 2024)
• Surcharge cannot exceed merchant's actual processing costs
• Dual pricing systems allowed but highest price must be disclosed
• Violations subject to $500 penalty per incident

New York implemented comprehensive credit card surcharge reform in 2024 under Governor Kathy Hochul's consumer protection initiative. The state requires businesses to display the total price including any surcharges before customers reach checkout, preventing surprise fees that burden families. New York joins Nevada, New Jersey, and South Dakota as states that limit surcharges to actual processing costs, while adding unique transparency requirements that set it apart from other jurisdictions.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Consult with an attorney before implementing surcharge programs, as rules can change and vary by business type.

Is Credit Card Surcharging Legal in New York?

Yes, credit card surcharging is legal in New York, but with comprehensive consumer protection requirements. Effective February 11, 2024, New York enacted new legislation (Senate Bill S1048A, amending General Business Law 518) that allows surcharging while mandating strict disclosure and cost-limitation rules.

The law represents Governor Hochul's effort to increase transparency and prevent New Yorkers from being surprised with hidden fees. According to the Governor's office, "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."

New York's approach balances business needs with strong consumer protections, requiring upfront price disclosure while preventing merchants from profiting on surcharge fees.

What's Allowed

New York businesses implementing credit card surcharges can:

• Display total price including surcharge before customers complete transactions
• Use dual pricing systems - show both credit card and cash prices side-by-side
• Offer cash discounts - list credit card price and provide discounts for other payment methods
• Charge up to actual processing costs - recover legitimate fees without profit
• Apply across all transaction types - in-person, online, and phone transactions

What's Not Allowed

New York businesses cannot:

• Post simple surcharge notices - signs saying "3% credit card fee" are insufficient
• Exceed actual processing costs - no profit allowed on surcharge fees
• Hide total pricing - customers must see final price before payment
• Use misleading terminology - cannot disguise surcharges as "convenience fees" or "service fees"
• Surcharge debit cards - prohibited under federal law

Penalty For Non-Compliance

New York enforces surcharge violations through multiple mechanisms:

• Civil penalties up to $500 per violation under General Business Law 518
• Attorney General enforcement - Consumer Frauds and Protection Bureau investigations
• Local government action - municipalities can enforce violation penalties
• Consumer complaint system - mediation and dispute resolution services

New York consumers can file complaints about improper surcharging with the New York Attorney General's Consumer Issues Division at 1-800-771-7755 or through their online complaint system.

How Surcharging Laws in New York Have Changed Over Time

New York's surcharge laws have evolved significantly, reflecting changing consumer protection priorities and payment industry dynamics. The Empire State initially prohibited credit card surcharges but faced constitutional challenges that led to a more nuanced approach.

The 2024 reform under Governor Hochul represents the most comprehensive update to New York's surcharge framework. The new law emerged from concerns about businesses using hidden fees to burden consumers, particularly during economic uncertainty. State Senator Jeremy Cooney emphasized that "transparency in pricing is critical so people can make informed decisions when spending their hard-earned money."

The immediate effective date of February 11, 2024, required businesses to quickly adapt their pricing displays and customer communication practices. Many businesses chose to eliminate surcharges entirely rather than navigate the new compliance requirements, while others implemented dual pricing systems to maintain transparency.

Types of Businesses That Must Follow New York's Surcharge Laws

New York's surcharge law applies broadly to "sellers" conducting sales transactions within the state. The legislation uses comprehensive language to ensure coverage across diverse business sectors and transaction types.

Covered businesses include:

• Retail stores and e-commerce platforms
• Restaurants and food service establishments
• Professional service providers (legal, medical, consulting)
• Contractors and home improvement services
• Entertainment venues and hospitality businesses
• Online marketplaces and digital service providers

Transaction coverage:

• In-person sales at physical locations
• Online transactions through websites and mobile apps
• Phone orders and remote sales
• Subscription services and recurring payments

The law's broad application ensures consistent consumer protection across New York's diverse economy, from small local businesses to large retail chains.

New York Credit Card Surcharge FAQs

What exactly must New York businesses display under the new disclosure rules?

Businesses must show the total price including any surcharge before customers complete their transactions. Simply posting a sign that says "3% credit card fee" is insufficient. Instead, businesses must display the actual final price customers will pay when using credit cards, making the total cost clear upfront.

Can New York restaurants add both automatic gratuity and credit card surcharges?

Yes, restaurants can add automatic gratuity for large parties and credit card surcharges, but they must display the total price including both fees before customers complete payment. The surcharge portion cannot exceed actual processing costs, and both fees must be clearly disclosed in compliance with New York's transparency requirements.

How do dual pricing systems work under New York law?

Businesses can display both cash and credit card prices (like many gas stations do), but if multiple prices are shown, the highest price that customers might pay must be clearly disclosed. For example, a restaurant can show "Burger: $12 cash / $12.36 credit" as long as both prices are equally prominent.

What documentation should New York businesses maintain to prove processing costs?

Businesses should keep detailed merchant account statements showing interchange fees, processing rates, monthly fees, and other charges. This documentation is crucial if the Attorney General investigates complaints or if consumers challenge surcharge amounts, since surcharges cannot exceed actual processing costs.

Are there different rules for New York City versus the rest of the state?

The state law applies uniformly across New York, but New York City may have additional local regulations. Some pending legislation (like Senate Bill S2570) specifically addresses city agency surcharges. Businesses operating in NYC should consult with legal counsel about potential additional requirements.

For more information about consumer protection in New York, contact:

• New York Attorney General's Office: https://ag.ny.gov
• Consumer Issues Hotline: 1-800-771-7755
• Online Complaint System: File Consumer Complaint

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