The New York Credit Union Association filed an amicus brief with the U.S. Supreme Court in support of the state of New York’s ban on credit card surcharges.
NYCUA said it “strongly supports” the ban, which was upheld by the U.S. Court of Appeals for the Second Circuit in the case Expressions Hair Design vs. Schneiderman.
The case, which will go before the highest court in the land early next year, involves a salon in Vestal, N.Y., which required customers to be charged additional fees if they wished to pay with credit cards.
In its brief, NYCUA General Counsel Henry Meier and VP of Governmental Affairs Michael Lieberman explained that that the New York state legislature passed the surcharge ban based on the understanding that surcharges and discounts form “separate pricing mechanisms” and not merely “two words for the same conduct.”
Meier and Lieberman further state that the ban does not regulate what merchants can say about the pricing structure. Instead, they wrote in the brief that “no-surcharge laws are economic regulations that do not infringe on merchants’ rights of Free Speech, and petitioners cannot invoke the First Amendment to accomplish in the Supreme Court what must be done in the chambers of Congress or state legislatures.”
The brief also indicated that in nations where they are authorized, surcharges inevitably become a source of merchant revenue instead of a mechanism to recoup transaction costs. Other points made in the trade group’s brief include:
- Merchants exercise monopoly control over how large a surcharge consumers pay.
- Credit card surcharges promote misleading pricing tactics and dubious marketing schemes.
- Banning “excessive surcharges” will not protect consumers from the negative consequences of surcharging.
- New York anticipated the negative consequences of surcharging experienced in other countries.
- Consumers do not construe pricing as merchant expression.
The brief concluded by urging the Supreme Court to affirm the judgment of the appeals court.
