Good Question follow-up: Confusion over new credit card surcharges

May 06, 2019 08:46 AM

ROCHESTER, N.Y. (WHEC) — A lot of you are reacting to a report News10NBC aired last week about fees that you can and cannot be charged when paying with a credit card.

Business owners are very confused after a recent court ruling that we reported last week.


Many of them feel they now can charge you more money all because you're paying with plastic. But credit card experts say, not so fast.

It comes after last week when we told you about a New York Court of Appeals decision. It ruled merchants should be allowed to charge you more if you pay with a credit card but only with exceptions. 

- You must be told upfront with a posted credit card price and a posted cash price for every single item.  

- A flat percentage surcharge is not allowed.

"You must list both your cash price and your credit price in dollars and cents conspicuously," said Attorney David Sieling with Brenna Boyce P.L.L.C.

But even then, Steven Miller with Electronic Merchants Systems believes business owners should tread carefully.

"Until Visa says okay we're all in line, it's against Visa's policies," Miller said.

Visa, one of the dominant credit cards accepted nearly everywhere, still lists New York as a state where businesses have "limited" ability to add surcharges based on the court ruling.

Miller says many businesses are breaking the rules.

"People are already doing it against Visa policies and people are outraged and won't go back to that business now," Miller said.

Like all businesses, credit card processing fees are a huge expense, costing as much as five figures per year. Many business owners feel it's within their right to charge more when someone pays with plastic.

But the owner of Jines Restaurant in Rochester refuses to add surcharges to bills, concerned it impacts the customer's experience.

"They (customers) don't want to look at their bill and say 'oh my gosh, he just rocked me with 3% because I paid with a credit card. No!'" said owner Peter Gines.

Until Visa clarifies its rules, Miller said Jines' policy may be the safest option to avoid hefty penalties.

Businesses caught violating Visa's policies can be punished.

"Visa has a watch list," Miller warned. "If you do anything against their regulations you could be posted on a watch list and could lose the option to use their service."

Gines says if businesses are crippled by credit card processing fees, look at all prices.

"You're better off just raising your prices by a nickel or two," Gines said. 

But some businesses, including here locally, are doing it all wrong.

A woman sent us a receipt from two local businesses. One hit her with a surprise surcharge on her receipt, the other -- a restaurant -- put a flat 3% surcharge on all bills if they were paid with a credit card. Both of those tactics are still against both Visa rules and state law.

"You have to know when you walk in the door you're going to pay more when you pay with credit card," Sieling said.

News10NBC reached out to the New York State Attorney General's office about the confusion. The attorney general is honoring the court's ruling.

A spokesperson told us the statute now stands as interpreted by the New York Court of Appeals. Sellers must post credit card prices in dollars and cents when they post prices.

Not doing so could lead to hefty fines even possible jail time for business owners.

"The price you're charging me for using my credit card better match the menu because that's the truth in menu law," Miller said.

If you consider all the swipes a business does in a typical day, violating this rule could be costly.

"That can get outrageous and crush someone financially," Miller said.


Pat Taney

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