New state law eliminates hidden fees, requires businesses to advertise higher credit card prices

A new state law is taking effect on Sunday that will impact businesses across Long Island. It will require stores and restaurants to be upfront about their prices and eliminate hidden fees.
The new law amends New York’s existing credit card surcharge law. It will prohibit businesses from tacking on service fees, processing fees, convenience fees, or non-cash adjustments to receipts in separate line items. Credit card fees must already be built into the price of an item.
This is meant to create transparency for consumers, so they know the actual price of an item before they hand over their credit card.
“New Yorkers should never have to deal with hidden credit card costs, and this law will ensure individuals can trust that their purchases will not result in surprise surcharges,” Gov. Kathy Hochul said. “Transparency is crucial in building trust between businesses and communities and now patrons will be empowered to budget accordingly.”
Currently, many businesses display signs that indicate there is a credit card processing fee—or they might post signs that state prices reflect an automatic cash discount. These signs will become illegal under the new law.
Business owners will have to advertise the higher credit card price—or charge the same price for both cash and credit cards. They can still choose to offer a discount for cash, but it is not mandated.
Consumers can file a complaint with the New York Department of State’s Division of Consumer Protection to receive a refund of any excess fees paid to a merchant.
They can also file a complaint with the attorney general for enforcement of a merchant they believe violated the law.
“New Yorkers using credit cards have a right to know the total cost of the purchase, inclusive of any surcharge, before they reach the register,” New York Secretary of State Robert J. Rodriguez said.
Gov. Kathy Hochul signed the measure into law in December 2023. It will go into effect on February 11, 2024.
Credit card surcharge guidance from the New York Department of State:
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% surcharge will apply for credit card purchases.
• “This business has a 4% 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 plus 4 % if paying with a credit card.”