Court decision moves law closer to allowing credit card surcharges

Q&A with Samuel J. Merchant

published in The Oklahoman | March 31, 2017

Earlier this week, the U.S. Supreme Court ruled 8-0 in a case in which a group of small businesses challenged New York’s law prohibiting merchants from surcharging customers’ credit card transactions as way to recover transaction processing fees imposed by credit card companies. The plaintiffs argued the law infringed on their commercial free speech rights because they were not able to impose and call the charge a “surcharge” as a way to communicate to their customers the costs of accepting credit cards. The high court agreed and remanded the case to the lower court for a constitutional analysis under the First Amendment.

In an Q&A with The Oklahoman, McAfee & Taft trial lawyer Sam Merchant explained the court’s decision and how it might potentially impact Oklahoma merchants. He also offered advice for businesses who wish to recoup the cost of accepting credit cards.

Merchant explained that while the decision doesn’t directly determine the constitutionality of Oklahoma’s no-surcharge law, the two state laws are similar enough that it will likely open up Oklahoma’s law to constitutional challenges as well.

“While merchants currently can’t surcharge credit card transactions and add to the final price, they may set a higher price and then offer a ‘discount’ from that price for customers not paying with a credit card,” said Merchant. “Additionally, federal law protects merchants’ ability to set a minimum charge of up to $10 per transaction, so merchants may set a minimum credit card charge if it fits within their particular business model.”