The ruling when it comes to the cash vs. credit card price: There should be no math

dollar bill on top of card

New York is one of 11 states that technically prohibits retailers from charging customers a surcharge for using a credit card when making a purchase. But the state's law allows merchants to give people a discount for using cash instead of a card. So, in the end, you can still be charged more for using a card.

The question of how to describe the credit card versus cash price in New York has been working its way through courts for the last few years, and even circulated through the Supreme Court of the United States at one point.

A group of businesses had filed a lawsuit seeking to affirm their right to tell customers, for example, "a haircut costs $10.00, and if you pay with a credit card you will pay 3% extra." The Court of Appeals, New York's highest court, ruled this week that's not allowed. From the majority opinion:

... [W]e conclude that a merchant complies with [this provision of the state's general business law] if and only if the merchant posts the total dollars-and-cents price charged to credit card users. In that circumstance, consumers see the highest possible price they must pay for credit card use and the legislative concerns about luring or misleading customers by use of a low price available only for cash purchases are alleviated. To be clear, plaintiffs' proposed single-sticker pricing scheme - which does not express the total dollars-and-cents credit card price and instead requires consumers to engage in an arithmetical calculation, in order to figure it out - is prohibited by the statute.

In other words, the price listing can't be something like "$10 (+ 3% when using a card)." It must be something like "$10 / $10.30 when using a card."

Over at the New York Law Journal, Dan Clark has more context for the case and highlights one of the judges' dissents over the it's-a-surcharge/it's-a-discount issue.

Earlier: New York State and credit card "checkout fees" (2013)


As a person who accepts credit cards for my hair services I find this interesting. Signs allowing a discount for cash make more sense, because any credit card fee is a tax deductible expense for the business owner. And frankly, most people pay with a credit card, so it seems punitive to charge them "extra" for doing so.
Ultimately the customer ends up paying for the business' cost of doing business, which we all do, of course. But make the price the price (high enough to turn a profit), and breakdown the costs privately come tax time.

Now can we please have taxes included in price? It's ridiculous to see that 9.99 sticker and then be changed extra 8% at a checkout that's not disclosed anywhere in store.

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