Assembly Panel Advances Democratic Legislation to Safeguard Consumers from New Credit Card Surcharges

Consumer protection legislation to prohibit retail merchants from imposing surcharges on consumer credit card purchases was approved by the Assembly Financial Institution and Insurance Committee. The legislation was sponsored by Assembly Democrats Gary S. Schaer, Vincent Prieto, Connie Wagner, Troy Singleton, Peter J. Barnes III, Daniel R. Benson and Angela Jimenez.

Sponsors note that this bill was introduced in response to a recent change in credit card regulations allowing merchants to impose a surcharge on consumers when they use a credit card as of January 27, 2013. Historically, credit card companies have not permitted retailer surcharging.

“This is just another swipe at the hard-working families of New Jersey,” Schaer (D-Bergen, Passaic). “Credit cards have become an essential element of the family budget. Added surcharges are simply not reasonable to consumers who are counting every penny to make it through.”

The change in U.S. regulation comes as a result of a provision required by merchants to settle a long-standing litigation brought by a class of retailers in 2005 against credit card companies. Retailers who choose to impose the new charge must disclose it on customer receipts – typically from 1.5 percent to 3 percent of the credit-card purchase – and post signs revealing it. The levy affects only purchases made with credit and charge accounts, not debit cards, according to consumer public advocacy group.

Ten states have banned imposing the new fees including New York, but not Pennsylvania.

“Additional fees nowadays can mean a decrease in how much a consumer can spend on their families using their credit card,” Prieto (D-Bergen, Hudson). “The amount of the surcharge may seem miniscule on paper, but in the family budget 1.5 to 3 percent could add up to a shorter grocery list or less to spend on gas. The legislation helps consumers take a stand against increased fees on already high credit card transaction costs.”

“Most businesses aim to encourage consumer spending with quality items at good prices,” Wagner (D-Bergen, Passaic). “Now, with the new surcharges, those who are using credit cards because of the lack of cash will be forced to go somewhere else or New York, where they will not be charged extra fees.”

“Every little bit helps in these economic times,” Singleton (D-Burlington) “However, on the other side of the coin, every little bit can add up and it can have a noticeable impact on the budgets of struggling middle class households across New Jersey.”

Credit card surcharges have been allowed in Australia since 2003. Approximately one-third of all retailers in Australia utilize the surcharges. However, some Australian Retailers over time began to charge significantly more to customers than they were paying in transaction fees. As a result, the Australian Federal reserve changed the surcharge rules to cap the amount retailers are able to charge consumers.

“Consumers are the lifelines to rebuilding New Jersey business and economy,” Barnes (D- Middlesex) “We must encourage consumer spending and help New Jersey families make every dollar in their budget count.”

“As New Jersey and the country rebuild economically and new opportunities arise for businesses, most families are also rebuilding their financial stability,” Benson (D- Mercer, Middlesex) “Added surcharges on the items they need – because they have to use their credit card — are the last thing that should have to worry about.”

“This legislation protects the consumer,” Jimenez (D-Bergen, Hudson). “And it’s the consumers that will help New Jersey’s economy get back on track.”

Some New Jersey retailers have expressed a disinterest in charging consumers an additional surcharge.

The measure was amended in committee to allow the current practice of charging different prices for cash/credit at a gas station, in accordance with existing law. The bill now goes to the Assembly Speaker who will decide when to post it for a floor vote. TLS.

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  1. As a business owner in this town, it was nice hear that we can now recoupe the LARGE amount of charges the CC companies charge us.

    What most people do not know is that the CC companies charge the businesses that you use every time you swipe your card. For every rebate offer you get from your CC company WE the business owner has to pay for it. Everytime you don’t have your card with you and ask us to enter in your CC number we are charged extra.

    You might be getting a great deal with free airline miles, the CC companies are not paying for it WE the business that you shop at pay for it.

    While it is nice for these legislatures are fight for you the consumer that are making it harder for the small business to make any money. Its says above that families on a tight budget can’f afford the extra 1.5% we NEITHER CAN WE but we don’t have a choice but to pay it.

  2. If you must use your credit cards to survive, go down to the local social service agency and apply for snap (foodstamps).

    If you dont think stores already pass along some form of their cost associated with credit card fees in the form of higher prices, you are naive. they may not say, thats $17.28, oh, visa, thats another 2.5%, they just factor that fee into their costs when determining pricing.

  3. WHY NOT charge the customer!!!!!! as long as you are TRANSPARENT about it.

    the law should be that you must have a sign stating that you charge.

    why should the govt dictate who should make money. the customer should decide were to shop, and that should dictate what the store should charge.

  4. It’s a bit pathetic the way you try to make yourself sound as if you are doing the consumers the biggest favor by allowing them to shop by you. Honestly, if people didn’t use CC’s, you would probably get a lot less business because people would only shop when they had cash on hand.
    If you choose not to take advantage of the shoppers who can’t currently afford to buy from you, but choose to do so anyways by ‘borrowing’ on their CC’s, then don’t accept charges. But if you are going to, then accept the costs as a business expense.
    Re # 3 and 4: I agree that most stores already may pass the charges on in the form of higher prices, as they do with all overhead costs such as rent, payroll etc. And yes, if someone chooses to charge a customer and is transparent about it, many people will then make the choice not to shop there.

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