Concern about restaurant credit card surcharges

| 18 Aug 2022 | 04:30

To the editor:

If you use a credit card for dining out or making purchases in NY then you need to read this. I am a resident of Orange County and have been wrongly charged a fee for using my credit card for far too long. My husband and I dine out frequently and have noticed that many restaurants have been charging a fee to use a credit card. It seems to be that more and more establishments are implementing this tactic incorrectly. I have also seen this in the dentist office, pet boarding, hair salon and other businesses as well. What is the issue you ask? It is illegal in New York State to impose a surcharge on a customer who elects to use a credit card in lieu of payment by cash, check, or similar means at the point of sale.

I have noticed that the restaurants place a statement, usually on their menu, that reads something like “We participate in the New York State cash discount program. The price on the menu reflects the cash discount price. Your check will be increased by 4% if you pay with a Credit Card.”

This violates NYS Law 518 as they are imposing a fee for using a credit card in lieu of cash. The restaurants have been hit hard by increased food prices, fuel, etc. I understand that, but as a diner, I have also been hit hard by the same increases, which leaves me less disposable income to use at a restaurant. There is a way for the restaurants to recoup the credit card fees, but I have not seen one that is doing it correctly. To be compliant, a restaurant has two options. Option 1 is that each menu item must be displayed with the cash price and the credit card price (like at the gas station). Option 2 is that the higher credit card price be posted on the menu and then offer a cash discount when the customer elects to pay with cash. If you receive a check and see a fee for using your credit card, this is illegal and you should not pay it. Some restaurants are using the term “Service Fee” or “Non Cash Adjustment.” These are all illegal.

This has been causing issues for us as we nicely ask to speak with a manager or owner once we see the fee on our bill. We then let them know that this practice is illegal and they are not allowed to impose such a fee. The responses are mixed but the majority say “Everyone is doing it, so why can’t I, no one is enforcing it.” The other common response is that their POS Company told them they are allowed to do it. This is very concerning as I have noticed that several establishments we informed still add the fee.

It is embarrassing to bring this up as onlookers listen in, but it shouldn’t be as I am not the one in the wrong. Nevertheless, complaining about an additional $4.00 fee is still something I would rather avoid.

In an effort to curb this practice, I called our County Executive Steve Neuhaus’ office. I was directed to send the complaint via e-mail along with “proof” to a specific person, which I did. About a week later I received a response directing me to file a complaint with the Attorney General’s office and NYS Consumer Protection. I am a county resident who is trying to notify other residents and did not receive sufficient assistance. I believe I should have received some additional assistance or guidance rather than getting brushed off.

I have since contacted The Office of NYS Consumer Protection who sent a letter to the establishment that illegally charged me the fee. I have since received a follow up e-mail stating that “the company has refused to respond to our office and suggest you contact the NYS Attorney General’s Office.” As a consumer, again I am being brushed off with no additional offer of assistance even though they concur that this practice is illegal. As a consumer where does this leave me? Why is someone not doing anything about this?

I now felt compelled to contact the Attorney General’s Office via the on-line form. I completed the form and after a few days followed up with a phone call. I spoke with the employee who handles these types of issues and was informed that they see the credit card surcharge issue many, many times. I was told that the way restaurants add surcharges is non-compliant with NYS law 518 and that this has become a big problem.

The person I spoke with asked if I contacted the County Executive Office, which as reported, I did. I provided them with the e-mail I received which basically told me to contact other agencies. I was told that the County Executive’s office should have assisted and can do the same thing that this office would do by contacting the establishment.

They also advised that outside Orange County any other county would help their residents by doing so; they see Orange County as lazy. The office did send a letter to the aforementioned establishment outlining the law, further advising merchants that the practice of posting only cash prices or advising customers that a percentage of the cash price will be added to their bill if payment is made with a credit card may be considered false advertising or a deceptive and illegal business practice and subject to further action by the Attorney General’s office.

You have the opportunity to help yourself and your community by speaking up. The fine for this charge per instance is up to $500 and/or one year imprisonment to the establishment owner. You have been armed with the knowledge that you need, and you have the power to end this illegal practice, so use your voice. Make yourself heard when you see this. Tell the establishment what they are doing is illegal and you will not pay the fee. Better yet, please file a complaint with, and You have the right to use your credit card and not be charged a fee and have the right to be heard in order to make this stop now!


Debbie Cuddy

NYS law 518