New York State and credit card "checkout fees"

credit card cornersFinancial services regulation fact of the day: starting this week merchants around the country are allowed to charge customers a "checkout fee" for using a credit card (even if many won't necessarily do so), as a result of a multi-billion dollar anti-trust settlement with Visa and Mastercard. But there won't be fees in New York State. [CNN] [NYT] [Consumerist]

Why? Because New York is one of 10 states that prohibit such fees. From the state code:

No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means. Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.

What New York doesn't prohibit: offering customers a discount for using cash, as some gas stations do*. It also doesn't prohibit minimums for using a credit card, though retailers have to notify customers of the minimums. And the minimums -- typical upper limit is $10 -- have to apply to all types of credit cards. The allowance of minimums is relatively recent -- a 2010 federal law opened the way for them. [Consumerist]

The structure of the transaction fees that businesses pay credit card companies is... complicated, and there's an argument that it results in a "reverse Robin Hood" effect, with people who use credit cards -- especially rewards cards -- being subsidized by people not using the cards. [NYT]

* There's a bill in the legislature that would prohibit this price difference at gas stations -- but it would also allow the stations to pass along the credit card transaction fee to consumers. (It's aimed at cutting down on large gaps between credit and cash prices -- like a $1 gap in Long Island last year.) [Newsday]

[via MeFi]

Comments

Giant step backwards. We should be moving toward a cashless society (money is filthy, people kill for cash, cash fuels an untaxed underground economy, etc) but this will reverse it. I have chosen not to do business with any gas stations that hide these surcharges as cash discounts, and I will do the same for any other merchants that want to penalize me for not wanting to have lots of cash on my person all the time. I would urge folks to immediately apply for a concealed gun permit, with the legitimate reason that you will be carrying large amounts of cash and will need the ability to protect yourself. If you have no criminal record and a few friends or relatives as positive character witnesses, the government will have no choice but to grant the permit. Then lets see how pissed these same politicians get who wanted stricter gun control.

Say Something!

We'd really like you to take part in the conversation here at All Over Albany. But we do have a few rules here. Don't worry, they're easy. The first: be kind. The second: treat everyone else with the same respect you'd like to see in return. Cool? Great, post away. Comments are moderated so it might take a little while for your comment to show up. Thanks for being patient.

The Scoop

Ever wish you had a smart, savvy friend with the inside line on what's happening around the Capital Region? You know, the kind of stuff that makes your life just a little bit better? Yeah, we do, too. That's why we created All Over Albany. Find out more.

Recently on All Over Albany

A quick recap of the week

Here are a few highlights from the past week on AOA: + It's the pivot and center of Albany's whirl -- and back in print.... (more)

Today's moment of late autumn

Otto got his first visit to Capital Hills since it closed for the season earlier this week. And by closed for the season, that means... (more)

New blog worth a look: Chefsday

One of our favorite things to do is to ask about people about their jobs. Not just "What do you do?" -- but more "How... (more)

The Anti-Rent War

This week we've been reading a bit about a wild episode of local history that we hadn't know much about: The Anti-Rent War, also known... (more)

Hands on History: 98 Acres in Albany

Two of the historians behind the 98 Acres in Albany project that's documenting the neighborhood knocked down for the Empire State Plaza will be at... (more)

Recent Comments

There is zen-like ritual to using and maintaining a straight razor, especially one that has over 100 years of history behind it. I highly recommend it.

A look inside The Shop in Troy

...has 9 comments, most recently from joe

The Anti-Rent War

...has 6 comments, most recently from Peter Christoph

Morning Blend for Nov 21

...has 2 comments, most recently from Mark H. Delfs

New blog worth a look: Chefsday

...has 1 comment, most recently from mg

That word

...has 4 comments, most recently from Joe A