New York Credit Card Surcharge Law: A Merchant’s Guide to GBL § 518

What NY GBL § 518 requires

New York’s revised surcharge requirements took effect February 11, 2024. When a seller imposes a credit-card surcharge, the credit price must be clearly posted with that surcharge included. The surcharge cannot exceed the business’s credit-card cost allowed by the statute, and the surcharge-inclusive sale price cannot exceed the posted price. The law also expressly allows two prices displayed together: cash and credit.

Read General Business Law § 518 for the controlling text and the NY Department of State guidance for its price-display examples. The state’s examples show prices before sales tax. Tax still needs to be calculated correctly; the surcharge rule does not create a tax exemption.

Surcharging, dual pricing and a real cash discount

• Surcharging adds a charge because the customer uses a credit card. In New York, showing a base price and announcing a percentage at the register does not supply the required full credit price.
• Dual pricing presents cash and credit amounts side by side. GBL § 518 allows this display, including a credit price with a surcharge included. The display alone does not decide whether your program is a surcharge under network rules.
• A true cash discount reduces the posted standard card price when a customer chooses cash. Adding a fee to a lower advertised price and calling it a cash discount does not make it one.

Have the processor identify the actual program in writing. Ask what the customer sees before paying, how each tender type is handled, what appears on the receipt and which network rules govern the transaction. A program name cannot answer those questions.

Post dollar prices customers can compare

A simple display example is “Cash $100.00 | Credit $103.00,” before applicable sales tax. This illustrates the display format only. It is not permission for every merchant to charge a 3% surcharge: your documented acceptance cost, card-brand limits and program terms may require less.

For a genuine cash-discount approach, the state also illustrates posting the higher credit price and describing the discount available for cash. Start the receipt from that posted standard price and apply the approved discount when cash is used. Have the provider confirm the configuration, including any debit treatment.

The NY surcharge violation examples reject a percentage-only notice and a lower price advertised as already including a cash discount unavailable to credit customers. A fee first revealed on the receipt is too late. Calling the same addition a technology fee, service fee or non-cash adjustment does not fix the missing upfront price.

Apply card-network limits as well as New York law

Visa’s current U.S. merchant guidance limits a credit surcharge to the lower of 3% or the applicable merchant discount rate. Visa requires at least 30 days’ notice to the acquirer, appropriate transaction reporting, and disclosures at entry, checkout and on receipts. Visa debit and prepaid cards cannot be surcharged, including when debit is run using the “credit” option.

Mastercard’s U.S. FAQ caps a surcharge at the applicable merchant discount rate with an absolute 4% maximum. A 4% ceiling is not a standard rate or permission to exceed actual cost. Mastercard currently says merchants need not register intent on its disclosure website while its rules are being updated; confirm current acquirer instructions before launch.

Use the Visa surcharge Q&A, Mastercard surcharge FAQ and Mastercard registration update linked below. Have your processor confirm the requirements of every accepted brand, including debit/prepaid exclusions, rather than applying one rate to every card. “Zero-fee” marketing does not waive a network restriction or a state requirement.

Work through a deli, restaurant and repair-shop sale

• Deli or retail counter: choose a few common items and compare the shelf or menu-board price with the POS display. Ring up a mixed basket and review cash, credit and debit results. Staff should be able to explain the displayed options without calculating a surprise percentage.
• Restaurant or bar: compare printed menus, QR menus and online ordering with the POS price book. Check modifiers, happy-hour changes, split checks and a tipped payment. Keep the payment-price explanation separate from optional gratuities and other service charges.
• Auto repair: carry the intended cash and credit totals from the estimate through approval and the final invoice. If approved work changes the total, update the customer-facing amounts before collecting payment. Test a deposit, the remaining balance and a refund, not just a single walk-in sale.

For example, 20 items at a posted credit price of $10.30 each produce a $206.00 merchandise subtotal. The register should not take that already posted subtotal and add a second card fee. This is an arithmetic check for double charging, not a recommended price difference or a tax calculation.

Understand the up-to-$500 civil penalty

GBL § 518 provides a civil penalty of up to $500 for each violation, recoverable through a court action or proceeding. Its enforcement provision names municipal consumer-affairs officials, town attorneys, city corporation counsel and other lawful local-government designees. It does not state a flat $500 charge automatically applies to every sale.

Treat a customer question about a mismatch as a reason to examine the setup promptly. Preserve the price display, receipt and processor configuration involved, correct the cause and get appropriate advice for any complaint or enforcement notice. Fixing the terminal does not by itself resolve an existing legal claim, and a payment provider cannot promise immunity from penalties.

Before you activate a cash discount or surcharge program

• Collect the agreement, recent processing statement, proposed pricing and written implementation instructions. Identify costs that remain: software, equipment, service, monthly minimums or other account charges.
• Choose the pricing model with your processor. Get the permitted rate or discount method, card treatment, required notices and start date in writing.
• Update every place a customer orders or agrees to a price. Assign someone to keep physical signs, digital menus and the POS synchronized.
• Test cash, credit, debit, prepaid, split tender, refunds and tips where relevant. Verify the displayed price, transaction total and receipt together.
• Train employees with an actual sale and a short explanation of the payment choices. Repeat the checks after a menu, software or pricing change.

This checklist is a practical implementation review, not a legal certification. For an unusual arrangement, a dispute or a formal interpretation, use a New York attorney. For the terminal, processor settings and staff handoff, Diaz Solutions can help you work through the details locally.

Bring your actual prices to the review

Santos Diaz works with Long Island merchants from Brentwood and can discuss the setup in English or Spanish. Bring one statement and a real example from your business: a lunch order, a retail basket or an approved repair invoice. We will compare the customer-facing prices with the way your processor charges you and discuss whether traditional pricing, cash discount or dual pricing fits your operation.

A good review ends with understandable numbers and a workable next step. It should explain remaining costs and customer impact before you change the sign on the door.

New York surcharge law: common merchant questions