With credit card surcharges now in the news, the Westchester Consumer Protection Department is working to clear up questions for consumers. More people than ever before are using credit and debit cards for payments in stores and restaurants, and some merchants are now seeking to add surcharges to bills to recover their transaction fees for these plastic payments.

Merchants recently engaged in a legal challenge to NYS GBL Sec. 518, which since 1984 had been interpreted to ban them from charging a credit surcharge. After an extensive litigation, the NYS Court of Appeals clarified this state law as follows:

  • Merchants can charge two different prices for purchases, one for credit cards and one for cash;
  • The higher price charged to credit card users must be tagged and posted for consumers in actual “dollars and cents” form; and
  • Merchants can call the price differential a surcharge.

Westchester County Consumer Protection Director Jim Maisano said: “After this prominent legal decision, if merchants decide to add a credit card surcharge to purchases, they should clearly inform consumers by posting the actual price with the surcharge. Consumers should not have to do math to figure out whether they are paying the surcharge. While merchants can now charge a surcharge, they cannot do so in a misleading way.”

Therefore, an extra fee for credit card purchases is now allowed but must be clearly set forth in the posted or tagged selling price for a good or service, not only on the bill at end of the transaction. Merchants must either display both prices (cash and credit) or the higher credit card price only, and if a merchant fails to do this it is a violation of NYS GBL Sec. 518. If the merchant only displays the cash price and says the credit card price is a certain percent higher, it also is a violation. Merchants cannot mislead or lure in consumers by only posting the lower cash discount price as consumers should be notified of the full price from the start of the transaction.

Additionally, Sec. 863.71 of the Westchester County Consumer Protection Code requires that for the marking of item prices and advertised prices, it shall be a violation “to sell or offer for sale any consumer goods or services at a greater price than the price displayed or advertised therefor.”

County law also mandates that gasoline stations that offer two tier pricing (cash/credit) need to display the higher selling credit price as well as the discounted cash price. Drivers must know when pulling up to the pump what their highest cost exposure is before filling their tanks. Debit sales can be considered credit sales or cash sales, the determination being made by the merchant.

If consumers believe merchants are engaging in deceptive or unconscionable trade practices regarding credit card surcharges, they can reach out to the Consumer Protection Department for advice at or (914) 995-2155.