Credit Card Surcharge Rules
It’s come to the attention of the NYC Hospitality Alliance that the state’s Office of Attorney General has received numerous complaints about restaurants listing the cash price of menu items and then adding an additional charge or fee to the bill of customers who elect to pay with a credit card.
The Alliance knows some credit card processing companies are soliciting restaurants’ business and falsely claiming that they may list the cash price of menu items and charge a fee when a customer pays with a credit card. They often refer to these fees as a “credit card surcharge,” a “cash discount program,” “non-cash adjustment fee,” and the like. Applying fees in this manner is prohibited.
Businesses like restaurant and bars ARE PERMITTED to:
- A business may list the credit card price of an item and offer a discount off the listed credit card price if the customer elects to pay with cash. For example, a restaurant may post a notice on their menu that reads, “3% discount for all purchases using cash.” However, the business may not list the cash price and add a fee if the customer pays with a credit card.
- A business may list the “cash price” and “credit card price” next to an item. For example, “Burger and Fries: $15.00 (cash price) or $15.45 (credit card price)”
The focus of the Office of Attorney General is for businesses to comply with these requirements but merchants who violate the law are subject to penalties, including fines of up to $500 per each violation. If a merchant has different prices for cash and credit transactions, consumers must be advised of such and, at a minimum, the credit card prices must be clearly posted on the menu.
You may click here to learn more in this alert from the New York State Division of Consumer Protection.