The U.S. Supreme Court unanimously overturned Wednesday a New York law that prevented businesses from charging an extra fee for credit card purchases. The ruling could affect a nearly identical law in Connecticut.

Merchants in Connecticut and nine other states can only offer customers a “discount” for using cash but can not charge a “surcharge” for using a credit card.

Whether or not the practice is legal depends on how the merchant describes the difference in price, which turned the case into a freedom of speech case.

The Supreme Court’s ruling in Expressions Hair Design v. Schneiderman determined that New York’s law “does regulate speech” and remanded the case to the Court of Appeals to determine whether or not the law is unconstitutional. The ruling could have ramifications for Connecticut’s law regulating surcharges and discounts.

According to Connecticut state statute, “no seller may impose a surcharge on a buyer who elects to use any method of payment, including, but not limited to, cash, check, credit card or electronic means, in any sales transaction.”

However, the statute also said that a discount is fine; “Nothing in this section shall prohibit any seller from offering a discount to a buyer to induce such buyer to pay by cash, debit card, check or similar means rather than by credit card.”

The practice is most commonly seen at gas stations which list one price for credit card purchases and a second for cash purchases. Businesses pay a 2 to 4 percent processing fee to credit card companies for every purchase a customer makes using a credit card.

Credit card companies contractually prohibit merchants from applying a surcharge to customers but this practice has been repeatedly challenged in court on antitrust grounds.

In the court’s decision, Chief Justice John Roberts wrote that state laws which mimicked and extended these contract provisions invited scrutiny because the antitrust suits have “created uncertainty about the legal validity of such contractual surcharge bans.”

The implication is that these state laws were designed to protect credit card companies in case their contractual prohibitions are ever ruled illegal.

The case originated out of New York when a lawyer noticed a sign at Expressions Hair Design that informed customers they would be charged an additional fee for payment by credit card.

New York Attorney General Eric Schneiderman argued that the law is a consumer protection issue and is meant to prevent businesses from adding fees to their posted prices.

The Yankee Institute for Public Policy and ten other nonprofit policy groups signed on to the amicus brief in November of 2016.

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