NEW LAW FOR NYS BUSINESSES: Adapting to New Credit Card Surcharge Regulations

Effective February 11, 2024, a new amendment to General Business Law Section 518 introduces significant changes for businesses regarding credit card surcharges. The key takeaway is that businesses can no longer add credit card processing fees as a separate charge for non-cash payments, even if disclosed. Instead, any surcharge must be included in the total grossed-up price displayed to customers prior to checkout.

Businesses have two main compliant options:

1. Two-Tier Pricing: Display two prices for each item with one including the surcharge for credit card payments and another for cash, checks, or debit payments.
2. Inclusive Pricing: Incorporate the credit card fee into all prices and offer a discount for non-credit card payments.

This change offers businesses an opportunity to demonstrate their commitment to fairness and transparency, potentially enhancing customer loyalty. Ensuring clear communication about pricing and payment methods is key to navigating these new requirements successfully.

Violations: If a business violates the amended General Business Law Section 518, there are significant consequences. Non-compliance can result in civil penalties of up to $500 for each violation. In more severe cases, a business could face criminal charges, leading to fines, imprisonment for up to one year, or both. It's crucial for businesses to adhere to these regulations to avoid legal repercussions and maintain a positive relationship with their customers.

To read Section 518 of New York State's General Business Law click here. To review New York State's Credit Card Compliance Guidance click here. New York State has also released an educational video which you can watch here.