The Effect of Credit Card Surcharges on Sale Prices in New Jersey Credit Card surcharges have been allowed in New Jersey since 2013. Prior to 2013, businesses were not permitted to charge a fee for acceptance of a credit card. This prohibition spurred businesses to bring a class action lawsuit against Visa and Mastercard. The settlement of the lawsuit allowed businesses to pass the cost of fees they were charged by credit card companies and payment processors onto their customers. As part of the settlement, certain rules must be followed before a surcharge can be charged to a customer, namely: 1. Display a sign at the point of sale, alerting customers about the credit card surcharge. 2. Tell the customer about the surcharge before they make the purchase. 3. The surcharge must be a separate line item on any receipt, both in-person and online. 4. Credit card companies must be notified 30 days in advance that a business is implementing a policy of charging a surcharge. 5. The amount of the surcharge must not be more than 4% or the actual cost to the business for processing the payment, whichever is smaller. (Effective April 15, 2023, VISA has limited the maximum surcharge to 3%.) Credit Card surcharges are not illegal under the New Jersey Consumer Fraud Act if they are disclosed to the customer. In 2019 (in response to the proliferation of credit card surcharges), New Jersey enacted legislation to prohibit retail establishments from requiring a “buyer to pay using credit or to prohibit cash as payment in order to purchase the goods or services.” A person selling or offering for sale goods or services at retail must accept legal tender when offered by the buyer as payment unless there is an applicable exemption under the law. See P.L. 2019, c.50, approved March 18, 2019 (N.J.S.A. 56:8-2.33). Violators of the law face a civil penalty of up to $2,500 for a first offense and up to $5,000 for a second offense. The law ramped up its civil penalty structure by making third and fourth violations, an unlawful practice under the New Jersey Consumer Fraud Act (CFA). See N.J.S.A. 56:8-2.33(b). With a third and fourth violation of the law deemed an unlawful practice under the CFA, violators face significantly higher civil penalties. A first offense carries monetary penalties of up to $10,000 and up to $20,000 for a subsequent offense. Additionally, there would be exposure to cease and desist orders by the Attorney General, the assessment of punitive damages, and the awarding of treble damages. The Office of Consumer Protection of the Division of Consumer Affairs (the Division) has deemed it a violation of N.J.S.A. 56:8-2.33 for a person to prohibit a buyer from using cash, refusing cash payment due to a buyer’s failure to use exact change and requiring BY GREYSON HANNIGAN 24 new jersey auto retailer
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