ROCHESTER, N.Y. (WROC) — There is a new guidance for New York State businesses when charging an additional fee to customers paying with a credit card, starting on February 11.
This new guidance comes after Governor Kathy Hochul signed into law Assembly Bill 2672 in December, which imposes disclosure requirements with respect to credit card surcharges for transactions with New York customers.
“Transparency is crucial in building trust between businesses and communities and now patrons will be empowered to budget accordingly,” Governor Kathy Hochul said.
The New York Department of State also provided a list of dos and don’ts:
DO:
- The business lists the higher credit card price next to a lower cash price.
- The business lists the credit card price for items and services, then lets customers know they will receive a discount for using cash.
- The business changes all prices to the credit card price.
DON’T:
- The business posts a sign on the door and at the register stating an additional 3.9 percent surcharge will apply for credit card purchases.
- “This business has a 4 percent cash discount incentive built into all pricing. Any purchases made with a credit or debit card will not receive the cash discount and an adjustment in cost will be displayed on your receipt.”
- A convenience fee, service fee, administration fee, non-cash adjustment, technology fee, processing fee, etc., is charged to credit card users and added as a separate line item on a customer receipt.
- The price tag of an item shows “$10.00, + 4 percent if paying with a credit card.”
Vendors will be required to post the highest price that consumers might pay when using a credit card, along with the price that is offered when the customer uses another payment method such as cash, check, or debit card.
Any surcharge must be no more than the amount charged to the business by its credit card provider.
Failure to do so can lead to a $500 penalty after every violation.
Local businesses continue to take and utilize credit card usage. Some businesses that spoke to News 8 that their customers’ credit card usage is about 90%.
For Three Heads Brewing’s taproom, that figure amounts to about 70%, but the president of the company, Daniel Nothnagle, says that credit card surcharges still cost the brewery $1,500 – $2,000 a month.
“We’ve always looked it as a necessary evil, we all like using credit cards, I use them myself for all my purchases, so no one wants to see extra fees, so we’ve always rolled it into the cost of products at the bar, we can afford to cover the cost of the surcharge,” he said.
He added a bulk of that surcharge is businesses footing the bill for credit card rewards programs.
