Retailers Say U.S. Supreme Court Should Rule in Favor of Free Speech on Credit Card Fees

The National Retail Federation today called on the U.S. Supreme Court to
allow merchants to freely and accurately show customers the added costs
that come with paying by credit card rather than cash.

“Retailers have no interest in surcharging their customers for using
credit cards,” NRF Senior Vice President and General Counsel Mallory
Duncan said. “That would be the opposite of our goal to bring credit
card swipe fees under control. But merchants do want to be able to show
customers the cost of using a credit card without running afoul of the

“This case isn’t about surcharging,” Duncan said. “It’s about giving
retailers freedom of speech when they try to give their customers a
break for paying by cash. Some states allow cash discounts but prohibit
credit card surcharges. A gas station owner shouldn’t be hauled into
court for saying gas is $2.90 a gallon cash and $3 credit rather than
saying $3 credit and $2.90 cash.”

Justices are hearing arguments today in a case challenging laws in 10
states that prohibit merchants from imposing a surcharge when customers
use a credit card. The laws, which were passed at the urging of the card
industry, can be traps for merchants who give a cash discount. The
lawsuit before the court argues that the laws violate merchants’ free
speech rights under the First Amendment and are unconstitutionally vague
under the Due Process Clause of the 14th Amendment.

Banks charge
merchants a fee
averaging about 2 percent of the transaction amount
each time a credit card is used, and a fee of at least 21 cents when
debit cards are used. The fees total more than $50 billion a year and
drive up costs for consumers because card industry rules effectively
require them to be built into the price of merchandise.

NRF is the world’s largest retail trade association, representing
discount and department stores, home goods and specialty stores, Main
Street merchants, grocers, wholesalers, chain restaurants and Internet
retailers from the United States and more than 45 countries. Retail is
the nation’s largest private sector employer, supporting one in four
U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to
annual GDP, retail is a daily barometer for the nation’s economy.


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