Many places see that it "only" costs 0.3% to deposit cash* and (probably incorrectly) conclude that accepting cards costs 10x more, so I'm not surprised that places are attempting to surcharge now.

* Example from Bank of America, page 2 ("30c per $100"). Plus, depending on the type of business bank account that you have, you might be able to deposit a significant amount of cash per month for free before they start charging.

It's strange how there are some businesses that have this mentality and others that vastly prefer (or only accept) non-cash payments precisely for the handling costs, including lost or stolen funds. I know there were some municipalities - I don't know if there are any rules at the state level - that mandate cash payments be an option. This was in response to some stores going cashless. As a workaround, I recall reading some establishments were accepting cash only for stored value cards. All other transactions had to be cashless.

I always assume the business that charge this fee are the same ones that are willing/able to go to lengths to hide a portion of their cash transactions from the gov't for tax reasons (and probably also keep the sales tax receipts on those transactions for themselves)

I loved using dollar coins when I had a bunch from the old treasury shipments.

One local bank had rolls of dollar coins (not the fresh rolls but they had rolls of various used dollar coins) but I haven't checked with them in years.

I was pleasantly surprised that this burger place that was cash only for years accepts credit cards now and with no surcharge (I hasn't been there in 2-3 years and discovered this when I stopped by there).

Mrs. Majuki hadn't been to the hair salon here in a long time. It was cash only before the pandemic and even during her last visit, which may have been two years ago. They finally started accepting credit cards as well with no surcharge.

Mrs Smith's hair salon takes card (and mobile payment at that) but mine doesn't.

Not a ton of detail here, but the Wall Street Journal saying Visa and Mastercard are going to hike network and interchange fees in 2024. This coming after Visa dropped their max surcharge in the US to 3% from 4%.
Not sure this is the greatest combination of moves with some congressmen proposing bills that would make rules on credit cards similar to Durbin (large banks having to offer a smaller, cheaper network on their credit cards).

Of course with things like the 3% surcharge drop, I'm not really sure how much it matters. My history with enforcement is that they will basically nudge the merchant acquirer who will send the form letter to the merchant, who will ignore it and still break the rules (most of these surcharges do not properly distinguish prepaid/debit cards [not permitted to be surchaged] and credit cards.)

My personal opinion is that most merchants implementing a surcharge with their acquirers aren't following the rules, are seeing "4% max", and just doing it, given how many have improper signage/warning and how many incorrectly surcharge debit/prepaid card swipes (which are not supposed to be subject so surcharge). I have trouble believing the actual cost of acceptance is exceeding 3% for most of these merchants.

I'm not even sure the proposed bill will do much. Most merchants likely won't implement credit routing at all (much like how debit routing is only really a thing at ~50% of stores) and for most of the rest, card issuers might end up just telling their customers to "make sure you choose Credit" (or Visa/MC/whatever) to get rewards. Attempts at forcing routing to the "cheaper" network will likely backfire, too, as people will inevitably think it's supposed to work like debit cards and thus think that "it should have run as credit" since they didn't need a PIN.

Really, if high interchange is that big of a problem, they could just flat out impose a cap like with Durbin and debit cards. While it's arguable how much good it did there, either, at least it's a far more direct way of tackling the issue.

For smaller purchases, the X% + Y cents fee structure that is typical for merchant agreements at smaller businesses could very well exceed 4% overall. Depending on how much the increase above ends up being, I could see minimums appearing along with surcharging.

But it's politically more difficult. One looks like government regulation and meddling, the other looks like it's promoting competition in the free market.

I think capping interchange is one of those things that could be politically palatable if sold the right way. i.e. "it hurts small business", "it's keeping inflation from going down" and "it keeps this country from having good infrastructure" (in the case of open loop transit). Not that it'll necessarily happen, mind you, but if they really wanted to...

Yes, that's basically how the Durbin amendment was sold. It's important to emphasize the savings for small businesses, otherwise the banks will fight it by claiming that it only gives money to Walmart and other big retailers.

So I was surcharged for the first time at a chain restaurant - a Chicago UNO Pizzeria location put a dinky label within the menu insert (on only one page) in the upper right that said they would charge 2.5% extra for credit and that it did not apply to cash checks. I did notice before I paid (because I checked the food menu, despite not eating at the bar ultimately) but the bartender did warn me when she brought the check that "we just started charging extra for credit, if you want to pay cash" and apologized.

Really tacky move on their part, especially when surrounding restaurants in the area aren't charging extra for credit.

Filled out the Visa form because I'll be back there in a month or so and I'm curious to see if they stop. Part of the large problem that I have is that surcharges are rarely applied to the rules and even debit/prepaid cards still get hit with the surcharge...

Probably just a matter of time until businesses start charging a “Cash Administration Fee” with a note stating “As an enhancement to our service to you, we impose a surcharge on cash, which is subject to change at any time, that is not greater than our ever increasing costs of handling, administering and depositing said cash. The surcharge today is 6.375%.”

Please remember, you read it here first :D!

LOL...Right! To handle cash, we need to factor in the manual process of taking to the bank, risk of getting robbed, and increased audit risk. So, that's the 5% surcharge.

Please don't encourage me ;).

Cable TV started as a paid service WITHOUT advertisements and now has just as many (if not more) ads than broadcast TV. ATMs started as the free alternative to human bank tellers and now have (arguably) hefty fees. Self-service gasoline and grocery store check-out are not discounted (as they should be based on labor cost savings). One way or another corporate America is going to get their pound of flesh* and unfortunately many people advocate that “what’s good for corporate America is good for Americans” :td:.

Probably just a matter of time until surcharges for self-service gasoline and grocery store check-out. Remember, you read it here first :D!

(* A "pound of flesh" was demanded as payment by the character Shylock in William Shakespeare's The Merchant of Venice, which may have taken the idea from the earlier Il Pecorone. The expression means to insist on getting something one is entitled to, even though it may cause distress to the person it is demanded from or one is determined to get what is theirs by right no matter how it may affect anyone else and regardless of the consequences.)

Couldn't agree more! Streaming was supposed to be sub service for us to enjoy without interruption. What? Now, they suddenly realize, "hey, if we can't sell advertising for hit shows, what's the point?!"

Yeah, Shakespeare's an oldie but goodie!

Off-topic for surcharges, but I will pile on with regard to changes in policies. Back when bar code scanning was new at the supermarket check-out, if the shelf price did not match the bar code price, the customer got the item (limit of one) for free. Several years ago, that practice stopped. Who thinks the error rate had dropped to zero, so it didn't matter? Anyone?

Still further off-topic, Dr Jabadski, I appreciate your etymology and history lessons, but I recall teaching a required undergraduate class in the earliest time slot that classes were offered (0730, in this case). Because a substantial minority of the student tended to arrive between 0730 and 0732, I would start right on time, but not with course material. Instead (and this was in the late 80s, before the World Wide Web), I would present highlights of that day in history. At the end of the semester, I was required to solicit evaluations from the students. Most students didn't address the history lesson at all, but a small minority said it was a great way to start the class and an equal number said it was a huge waste of time. De gustibus.

Please report back if that's the case. I filled out a complaint form with both Visa and MC for the local Wing Stop back in 2015 because they were requiring ID for a credit card purchase and had signs indicating this. I returned a couple of weeks later and all of the signs had been removed.

I'm curious about the feasibility of this given that cash is legal tender. One might also question why the establishment simply wouldn't raise prices across the board. To push back against merchants going cashless - admittedly, this was prior to the pandemic - some places starting requiring merchants to accept cash.

I'm not old enough to remember, but were there ever fees associated with using human bank tellers?

You calling me old :o ???

I’m old enough to no longer remember :D !!! (Yes, I'm allowed to call myself old ;).)

Best I can recall no, there have never been fees for using a human teller but that type of fee was often strongly implied as banks advertised and promoted fancy new ATM machines. Banks advertised speed and convenience for customers, not (labor) cost savings to banks.

Isn’t that the basic question of this entire thread? Credit card surcharges should be included in all prices as a cost of doing business. I wonder if the credit card fees are greater or less than the costs (time, labor, equipment, theft) to count and secure and deposit cash. I wouldn’t be surprised if, even with the fees, credit cards are less costly for many businesses.

Credit card surcharges are minimally, if at all, different than resort fees, fuel surcharges and COVID fees; just another way of stating “price gouging”.

Thank you for the compliment and thank you for your Latin etymology lesson. FWIW, writing as a former pre-med student who was always on time for his MANY early classes, I would have been 100% on time and I would have appreciated the off-course lessons :tu:.

Perception is everything. A lot of the places that are surcharging likely do believe that cash is less expensive, even if it really isn't. I'm not sure if that's something that can be easily fixed, other than just not going to those businesses.

(FWIW, many of the few things I deal with that surcharge or don't take cards at all are still fine with payment methods that leave a paper trail. For example, checks and Venmo. IMO, that makes it less likely that tax evasion or similar is a significant factor, though I don't deny that does happen.)

this. In my city I call it risk of robbery. Who needs it? And decades past is when one could lose the paper receipts. I love the current technology for plastic.

This is not about cash handling being as costly, but as merchants are allowed to charge a surcharge, so why not.

I think most cities will require merchants to also accept cash for equity purposes, but most people will likely not switch to cash to save the surcharge. And, I find surcharge so prevalent in small/medium businesses that boycott is not so effective. Limits on interchange fees seem to be a better solution for both consumers and businesses.

For most smaller businesses, interchange caps are really only going to affect their payment processor; there's nothing stopping the payment processor from charging the merchants the ~3% anyway and pocketing the difference. Additionally, governments in the US pretty limited in what they can do to discourage/ban surcharging now, so I fully expect the businesses currently doing so to continue even with a cap in place--it might just end up being like a 1-2% surcharge instead of 3-4% (again, depending on the merchant's agreement with their processor).

I had to pay a federal government fee this morning and surprisingly, pay.gov didn't seem to charge a surcharge for paying by card instead of ACH. Hopefully it stays that way. :tu:

Agreed, hope it's not Dollar Coins Part Deux.

https://cimg0.ibsrv.net/gimg/www.fly...9e54ed646d.jpg
Trying to make the surcharge not a surcharge

Another local restaurant trying to get cute on "it isn't a surcharge, there's just a cash discount baked into the menu prices that will be removed if you pay with a card" game.

NY General Business Law Section 518 expressly prohibits this practice. You have to either display the combination of prices (cash and credit payment) or display the highest price with the discount amount for cash payment.

Sent it off to Visa. Not a place I regularly frequent but may end up there in the future. Curious to see if Visa responds.

That law was struck down in court. See Expressions Hair Design v. Schneiderman.

That ruling was widely interpreted as overruling surcharges in the state of New York. What Expressions v. Scnheiderman actually did was remand to a lower court that Expressions' argument was a free speech issue, not just a business conduct issue, and that lower courts would need to rule on that.

As far as I can tell, there is no ruling towards that end. It remains legal under GBL Section 518 to require a business to list either the higher price, or both prices at once. Hence why gas stations in the state list regular credit and regular cash prices, and more responsible restaurants either don't surcharge, list both prices, or list the higher price while mentioning the cash discount amount.

EDIT: Another source:
So in New York, you can post "cash: $9.00 credit: $9.27" and that's legal, but you can't post "cash: $9, credit add 3%".

Correct, but in light of the Supreme Court ruling, I think it's assumed that the lower court wouldn't have any other choice but to say that surcharges are protected free speech. Therefore, as far as I'm aware, New York is no longer enforcing its law against surcharges.

And of course Visa can't enforce a state law either.

So it's effectively legal because there is no practical recourse against it, even if the statute hasn't been formally struck down.

Regardless of what courts say, businesses have been operating as though surcharging has been allowed for quite a while now. I just wish they would abide by card network rules (i.e. not surcharging debit and having sufficient notice for customers) because at least there'd be a reasonable non-cash alternative. As it is, the alternative for customers is effectively cash*, and that's definitely not ideal.

* I wouldn't call Venmo and similar alternatives since they're not that much cheaper for businesses than just taking cards. Not to mention they have even poorer acceptance than the various debit networks (one of the reasons why debit cards pretty much all have Visa or MC logos on them these days).

On remand, The New York State Court of Appeals responded:
To comply with the freedom of speech element, a merchant is allowed to charge different prices in the state of New York for cash and credit. That can be $5 and $5.10 for cash and credit, or it can be $5 cash $100 credit according to NY GBL 518. But they have to state either the higher price, or both the cash and credit prices. They can't just state the cash price.

Visa can't enforce a state law, but when they reply to the merchant and merchant acquirer, they can point out that they're not only violating Visa's own agreed upon terms, but they're violating state law as well (a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both). What the merchant does with that is up to them.

Enough people put up with it that merchants are scofflaws. I would bet that if more people submitted complaints with the NYS Attorney General's office, that merchants would change their tune.

I'm taking the Visa route because it's more passive and I'm curious to see if a network leaning on an acquirer/merchant is enough, or if it takes an AG complaint to get merchants to listen.

Visa no longer lists New York on its list of states that prohibit surcharges, so I don't think they are going to take any action if they get a complaint about a surcharge in New York. Even if they do, I doubt they are going to point out any legal matter to merchants or their acquirers, as this really isn't their concern.

As for complaining directly to the state, I'm sure plenty of people have already filled out that form. Ever since the SCOTUS ruling, I haven't heard of a single case of the attorney general taking any sort of action. So it's pretty clear that the state has conceded that they cannot enforce this, even if their website claims that it is illegal.

Wot???
 

Originally Posted by Court of Appeals
By disclosing the total dollars-and-cents price charged to credit card users, a merchant complies with the statute.

This is crazy. Discounts where the higher price was quoted were already legal in every state. The instant case was about surcharges where the lower price is posted. SCOTUS found that merchants had a right to surcharge as a matter of free speech. However, upon remand, NY found that their law mandating the higher price stands. The merchant must display (at least) the "total dollars-and-cents price charged to credit card users." They can still characterize the differential as a surcharge, even though as the court openly admits, it's not! And voila, there goes your free speech cause of action. So NY is following the letter of the law but certainly not the spirit/intent. No wonder no one's enforcing it!

The ruling from SCOTUS and the remand to the Second Circuit Court of Appeals was on the issue of NYS GBL § 518 constituting a free speech restriction, of which there are multiple standards for commercial speech: the Central Hudson standard, and the Zauder standard. In the original ruling against Expressions Hair Design, the Court of Appeals did not consider the free speech standard. On remand, the Supreme Court sent it back for the Court of Appeals to determine if it was an unconstitutional free speech issue.

The Court of Appeals determined that preventing a merchant from calling it a surcharge at a point of sale sign, or door sign, or menu would be an unacceptable free speech restriction. However, it held that the requirement to either post the highest price or both prices does not constitute a free speech restriction as it is a reasonable commercial disclosure to prevent consumers from being lured in by lower prices only to find higher ones at the register, or having to do mental math to determine what they actually have to pay.

Cash discounting has been allowed (10 cents less a gallon cash, 5% off for cash). What the NY law requires is that the highest price possible be posted conspicuously, or both prices. A merchant is free to charge $10 cash $10.30 credit as a 30 cent credit surcharge, or to post $10.30 and say "3% discount for cash" or "30 cent discount for cash". This is what the state says it intends to enforce, and it encourages consumers to submit non-compliant merchants to them with evidence to assist in enforcement. As far as I can determine from news sources, no further challenge to New York's interpretation of forcing the merchants to display the higher price only or both prices has been successful in court.

There is a bill to more clearly state this expressly in the Bill's language via amending it, but the bill just codifies in words what the Court of Appeals say is how the law should be interpreted to begin with (given that it was modeled after and passed after similar provisions in the federal Truth in Lending Act expired in 1984).

It's possible the state may not be enforcing it because they don't see it as winnable, but the current law and the Court of Appeals' interpretation of it would back them in enforcing it - and the state says they intend to.

Visa not listing NY as a state that can't be surcharged is also accurate because the SCOTUS ruling held that a dual pricing scheme (higher for credit) was effectively a surcharge. A merchant can say "Cash $10, 3% surcharge added for credit which is $10.30". But they can't just say "Cash $10, 3% surcharge for credit" or "$10, which reflects a 2.5% cash discount which will be removed if you pay with credit".

To be clear, the Court of Appeals doesn't have any authority over this case, they were just answering a certified question. It is now up to the 2nd circuit what to do with this response. I think the case is still pending, and whatever the 2nd circuit does is likely to be appealed to SCOTUS again. That may be why New York is holding off for now.

I don't believe this is true because after checking both dockets for Expressions Hair Design v. Schneiderman on PACER.gov, both cases were closed. Expressions Hair Design and the State of New York agreed mutually to dismiss the appeal on Jan 14th, 2019.

Thus, unless another party has challenged the State of New York's Interpretation in some other case, the interpretation that the state has would stand as the original party for the SCOTUS ruling gave up and the interpretation provided by the state court to the 2nd Court of Appeals is presently unchallenged - which would make sense on why the state feels comfortable to state that the listing of the single higher price or requiring both prices to be displayed is valid.

Thanks, I hadn't realized that the case was closed. It will be interesting to see what happens if the state decides to try enforcing the surcharge ban again.

Not a major update, but I did get a snail mail letter over my NYS AG complaint thanking me for my submission and that while they don't enforce over individual complaints, they blahblahblah consider it in aggregate.

Compared to prior AG complaints as an individual, this is the most boilerplate generic broad response I have gotten, ever, in 15+ years.

My opinion: New York is positing that they're willing to enforce over the "higher price or dual price" scheme, but is unwilling to actually do so beyond press releases and website posts.

If I receive proof to the contrary, I will update (the merchant I inquired about was one I'd only been at once ever). But the present response gives me the impression the AG is unwilling to enforce at this point.

The car wash by my work apparently switched their POS setup (again) and didn't charge me the surcharge this time. I don't know if that means they fully got rid of it or if they just haven't bothered to reimplement it again yet, but hey, at least no surcharge for the time being.