SCOTUS To Mull The Credit Card Surcharge Battle

In the latest salvo of the war over credit cards, surcharges and retailers who pay “swipe fees” when consumers deign to use cards rather than pay with cash … here comes the United States Supreme Court.

As reported on Thursday (Sept. 29) by numerous outlets, the highest court in the land has agreed to hear a challenge brought by several merchants contending that a law in New York State that bans surcharges should be considered a violation of free speech.

State-specific laws — extant in nine other states in addition to New York — mandate that stores cannot state that they are imposing surcharges tied to credit card transactions. Rather, they must state that they are actually offering discounts if consumers pay with either cash or debit card. The merchants themselves, according to Bloomberg, would, of course, like to truncate the fees they incur known as “swipe fees” if they could, in fact, deter credit card use. That might come in the event that they would be allowed to levy explicit surcharges on those transactions tied to credit cards.

Court papers filed by the retailers, led by Expressions Hair Design in New York, contend: “Surcharges actually make consumers more informed rather than less by truthfully and effectively conveying the true costs of using credit cards.”

There’s some time until anything gets decided, as the Supremes will not hear actual arguments until 2017 and a ruling will not come until June of that year.

At issue is whether the no-surcharge mandates are a form of free speech or whether the law is a way to steer consumer conduct.

Separately, the New York Credit Union Association said in a statement via President and CEO William Mellin: “We know from experience that, when merchants are allowed to charge credit card surcharges, the result is more expensive products for everyone, not cheaper products for cash users. The decision by the Supreme Court to hear this case will provide nationwide clarity about the ability of legislatures to ensure consumers are treated fairly, regardless of which payment method they use.”