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What New York’s New Disclosure Law on Credit Card Charges Is and How It Affects You

Woman giving her credit card to the waiter to pay for their meal

New York has adopted a new consumer protection law on February 11, 2014. This law requires businesses, even restaurants, to show credit card surcharges in their prices.

This law mandates that businesses do one of the following.

  • Incorporate credit card processing fees into their prices.
  • Display two separate prices: One for cash payments and another for credit or charge card payments.

What This Means for Customers

“This law will ensure individuals can trust that their purchases will not result in surprise surcharges,” said Gov. Kathy Hochul. “New Yorkers should never have to deal with hidden credit card costs…”

Hochul signed the bill on December 13, 2023. With it, she aims to create more protections for all consumers. Check out the video below by New York State on the credit card surcharge law.

[Source: NYS Department of State]

What This Means for Restaurant Operators

This new law on credit card processing fees is a big change for restaurant operators across the state.

These fees are the third-highest restaurant expense, according to the National Restaurant Association. Consequently, some restaurants have resorted to charging credit card fees on bills to offset the costs.

While restaurants can still do this, they now need to ensure greater transparency in their pricing structures. These price changes should also not confuse or disappoint customers.

Restaurants are also encouraged to explore other strategies to lessen the fees’ impact. For starters, they can incentivize cash payments through discounts or rewards programs.

How To Comply as a Business Operator

To follow the law and avoid receiving fines of up to $500 per violation, here’s what you can do:

  • Display a higher credit card price alongside a lower cash price
  • Present the credit card price for items and services; inform customers of a discount when paying by cash
  • Convert all prices to reflect the credit card price

And here’s what you can’t do as a business operator:

  • Post notices on doors or registers indicating an additional surcharge for credit card purchases
  • State that all prices include a cash discount not applicable to credit card transactions
  • Add separate line items (e.g., convenience fees, service fees, processing fees, etc.) on credit card receipts
  • Indicate on price tags an additional percentage for credit card payments (e.g., “$20.00 + 4% if a credit card purchase)

Customers should keep in mind that this law does not apply to debit cards.

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