TRENTON — New Jersey merchants who charge customers extra for paying with a credit card must now disclose that surcharge clearly before the transaction and cannot charge more than what it actually costs them to process the payment, under a state law highlighted in new guidance from the Division of Consumer Affairs.
Governor Phil Murphy signed the law, which prohibits sellers from imposing a credit card surcharge greater than the actual cost of processing the payment. The Division of Consumer Affairs released a set of frequently asked questions to help consumers and merchants understand their rights and obligations.
Under the law, a seller that imposes a surcharge must notify the consumer of the amount of the surcharge before the customer incurs the charge. Disclosing the surcharge as a percentage is permitted, but a general statement that a surcharge will be applied is not sufficient without also disclosing the amount.
The notice requirements vary by type of transaction. Restaurants must disclose the surcharge amount on signs in the customer service area and on menus, including menu boards and menus accessed online or through a QR code. There is no required format for the signage; handwritten notes, stickers, or homemade signs are acceptable as long as they are clear and posted in the required locations.
Sellers other than restaurants must disclose the surcharge amount on a sign at both the point of entry and the point of sale, such as a cash register or wherever payment is collected.
For online, mobile application, or electronic kiosk transactions, sellers must provide clear and conspicuous electronic notice of the surcharge on the checkout page. Sellers who process credit card payments over the telephone must provide verbal notice of the surcharge before processing the transaction.
Imposing a surcharge is not mandatory. Businesses may also charge a flat surcharge rate for all credit card transactions, so long as the rate does not exceed the actual cost of processing, even if that cost varies by card type.
The surcharge cap applies only to credit card transactions and does not apply to debit card or gift card transactions, though other charges and fees imposed by sellers must still be clearly disclosed under other consumer protection laws.
Consumers who suspect deception or fraud may contact the Division of Consumer Affairs’ Office of Consumer Protection at (800) 242-5846, or (973) 504-6200 if calling from outside New Jersey.
