First of all, if you are in a state where it is illegal to impose a surcharge on customers, the decision to add a credit card surcharge is simple. Unless you should expect legal action or high penalties, you should not introduce any surcharge under any circumstances. Here are a few states where offering credit card supplements is illegal: Percentage note: At the end of Alex`s doctor`s appointment, she sees a sign that says “3% fee for all credit and debit card transactions.” How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned with the card, less the associated annual fee. These estimates here are only those of ValuePenguin, not those of the card issuer, and have not been verified, approved or otherwise supported by the credit card issuer. Surprise fees: A couple orders lunch at a fast food restaurant. The cashier specifies an amount, but if the customer offers a debit card for payment, the cashier indicates that the total amount is now $2 more because he does not pay in cash. In October 2018, the Court of Appeal concluded that as long as merchants indicate the total price (including cents), they can legally call the difference between cash prices and card prices what they want – a discount, a surcharge, etc. At Gavel Grill restaurant in the St. George`s neighborhood of Staten Island, using a credit card now comes at a price: eighty cents per transaction. A credit card surcharge, also known as a payment fee, is an additional fee that merchants or restaurants charge their customers to cover these credit card transaction costs. The amount you charge customers for these fees depends on your payment processor`s pricing model, so make sure you understand the credit card processing fees that appear on your restaurant`s monthly billing. The National Retail Federation claims that these fees typically fall between 2 and 4 percent — essentially what credit card companies charge merchants for each transaction.
If you charge extra extras, convenience fees, or other additional costs (assuming it`s legal in your state), you`ll also be at a disadvantage. A strong incentive to use a credit card is to buy the miles or points as an accessory benefit, not to pay extra dollars. Adding extra is like vomiting an extra obstacle hunting door before a payment. After working on a case and providing excellent service, attaching an additional fee in the form of a supplement can end an otherwise positive interaction on a bitter note. Why should this be the last impression a client has of your work? Reward Rate Calculation Example: When Chase Sapphire Preferred Points are redeemed for travel via Ultimate Rewards, they are worth $0.0125 each. The card awards 2 points for travel and food and 1 point for everything else. Therefore, we say that the card has a reward rate of 2.5% for restaurants and travel (2 x 0.0125 USD) and a premium rate of 1.25% for everything else (1 x 0.0125 USD). But public reactions are mixed, which begs the question: Should you charge extra credit card at your restaurant? Consumers can better support their complaints by providing evidence of non-compliance, which may include images of the advertised price and fees, receipts of fees charged, details of the merchant`s location, etc. The New York State Consumer Protection Division offers voluntary mediation between a consumer and a business if a consumer has failed to find a solution on their own. The 1-800-697-1220 Consumer Helpline is available Monday to Friday from 8:30 a.m. to 4:30 p.m., except holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumerprotection.
To view consumer alerts, consumers can visit here. The division can also be contacted via Twitter on @NYSConsumer or Facebook on www.facebook.com/nysconsumer. Note on a percentage fee: A sign in a veterinarian`s office reads, “There is a 3% surcharge for all debit and credit card transactions.” Are credit card surcharges legal in New York City, or can you call a company if you`re surprised by a stealth surcharge that`s suddenly applied when you try to pay your bill with a credit card? What happens if the surcharge only applies to AMEX cards? As part of its seven-episode Christmas Consumer Alert series, the New York State Consumer Protection Division reminds consumers that credit card surcharges are prohibited in New York State. Businesses are not allowed to advertise a price and charge a surcharge at the point of sale if a consumer chooses to pay with a credit card. Instead, businesses are required to inform consumers of the higher credit card price for a product or service by displaying the higher price. Businesses are also able to offer a discount to consumers who pay in cash. New Yorkers who use debit cards do not have the same protection as those who use credit cards. A surcharge or higher fee for the use of a debit card is permitted, but must be accompanied by clear disclosure in advertised road signs or a prominent location at the retail location. “Many consumers and businesses are confused when it comes to surcharges in the marketplace,” said Secretary of State Rossana Rosado, who oversees New York State`s Consumer Protection Division. “New York companies need to advertise with exact prices. A business can offer a discount if consumers pay in cash but no longer charge at checkout simply because a consumer uses their credit card. The following illustrates the current transactions of New York consumers: Fast forward of a few months at the request made by the merchant plaintiffs and the supplements are effectively legal in New York.
This scenario is illegal under applicable NYS law. That`s what the plaintiffs wanted to do, and according to the New York State Court of Appeals, it`s not allowed because the exact price in dollars and cents when paid by credit card is not published anywhere. This is not governed by New York State law, but is not permitted in the AMEX Merchant Agreement, which states that merchants cannot charge more to accept AMEX than to accept other credit cards such as Visa or MasterCard. If the merchant only accepts AMEX cards (and no other credit cards), the surcharge is allowed, but in this case, the merchant must still comply with New York State law by specifying the actual amount to be paid when using an AMEX card (in dollars and cents) compared to cash payment. For example, a merchant who wants to charge customers who pay with a credit card an extra 3% can do so, but only under certain conditions. From the Supreme Court decision in Expressions Hair Design v. Schneiderman (2017): “A merchant who wants to charge $10 in cash and $10.30 for credit may not arbitrate this price as he wishes. It`s not free to say “$10, with a credit card surcharge” or “$10, plus $0.30 for credit,” as both screens identify a unique sticker price — $10 — that is less than the amount charged to credit card users. If the merchant wants to publish a single sticker price instead, they must specify $10.30 as the sticker price.
A five-year legal battle that is now over gives New York merchants the right to add a credit card surcharge to customers` bills. Not surprisingly, many restaurants see this as an opportunity to cover some of the payment processing costs imposed by credit card companies by charging their customers extra. This case dates back to 2013, when several companies, run by Expressions Hair Design, filed a lawsuit in federal court. They demanded that the state allow merchants to collect a surcharge, challenging the ban on telling customers how much merchants paid for credit card transactions. Following an application submitted in January 2019, New York merchants can now charge a credit card surcharge as long as it is clearly displayed to customers.