Payment Methods

National Retail Federation Says Law Violates Merchants’ Freedom Of Speech

The National Retail Federation (NRF) is calling for more transparency when it comes to credit card fees, urging the Supreme Court to let merchants show customers the extra costs that come with paying with a credit card instead of cash.

In a press release announcing the move on Tuesday (Jan. 10), NRF SVP and General Counsel Mallory Duncan said retailers aren’t interested in tacking on surcharges for customers who use credit cards as a payment method.

“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 law,” she said, noting the case isn’t about surcharging but giving retailers “freedom of speech” when it aims to give customers a break for paying with 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,” Duncan said.

According to the report, justices are hearing arguments Tuesday in a case that challenges a state law in 10 states that prevents merchants from hitting customers with a surcharge when they pay with a credit card. The National Retail Federation contends the law, which it said was passed with the full support and urging of the credit card industry, “traps” merchants who give a cash discount. The lawsuit contends the laws violate free speech rights of merchants under the First Amendment. The National Retail Federation noted banks charge merchants a fee of around 2 percent of the transaction amount for each credit card purchase and a fee of $0.21 or more when debit cards are used. The fees total more than $50 billion annually and increase the costs consumers pay for products, it said.


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