BILL NUMBER: S8774

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the general business law, in relation to requiring sell-
ers to clearly post the price of a credit card surcharge

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one amends section 518 of the General Business Law to provide
that no seller in any sales transaction may impose a surcharge on a
holder who elects to use a credit card in lieu of payment by cash,
check, or similar means unless such seller clearly posts the credit card
price, inclusive of such surcharge, at the location where the sale
occurs, and provided further that the final sales price of any such
sales transaction, inclusive of surcharge, shall not amount to a price
greater than the posted price for such sales transaction.

 
JUSTIFICATION:

In 2018, the New York Court of Appeals heard a challenge to section 518
              

of the General Business Law (GBL), which provides that merchants may not
impose a surcharge on a customer who pays by credit card. The Court
ruled that the statute as it reads is incorrect and that merchants may
in fact charge a surcharge to customers paying by credit card. Sellers
do not run afoul of the statute, so long as they post the total dollars
and cents price that customers will be charged (See Expressions Hair
Design, et al. v. Schneiderman, 32 N.Y. 3d 382, 2018). This means that
the total price, inclusive of the surcharge, must be clearly presented
to the customer.

The Court noted that the type of surcharge that is expressly prohibited
by GBL § 518 is posting a cash price and stating that the credit price
is the cash price, plus an additional percentage; for example, adding a
3% charge for a credit transaction. Per the Court, customers must not be
expected to do the math to figure out the total price that they will be
paying.

This legislation provides much needed clarification to GBL § 518, by
codifying the Court's ruling in Expressions Hair Design. The bill amends
this section of law by providing that merchants may not impose a
surcharge on customers paying by credit card, unless they clearly post
the credit card price, inclusive of the surcharge, and as long as the
final price of the transaction, including the surcharge, does not amount
to a price that is higher than the posted price.

This bill is necessary to prevent consumers from being misled when
making a purchase using their credits cards.

 
PRIOR LEGISLATIVE HSITORY:

New bill

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.