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NY attorney general cracks down on credit card surcharges

Daniel Ray

A growing, and largely misunderstood, practice of charging less for cash and more for credit cards has caught the attention of New York Attorney General Andrew Cuomo.

His office announced today that it’s cracking down on 43 Long Island gas stations across Nassau and Suffolk counties, sending them “cease and desist” letters over charging surcharges for gas bought with credit cards.

About one-third of Long Island gas stations surveyed engaged in some sort of deceptive practice, Cuomo’s office says, either through the surcharges or by advertising the lower price and failing to disclose the surcharge.

“With summer gas prices reaching an all-time high, the last thing Long Island drivers need are gas stations hitting them with exorbitant prices for paying with a credit card,” Cuomo said in the announcement. “Our investigation revealed that Long Island is a hotbed for gas stations that engage in deceptive practices where they display one price as a way to lure customers — and then charge them more at the pump.”

New York has a law that prohibits retailers from charging a surcharge for credit cards, according to the announcement.

In most of the rest of the country, it’s not state law, but merchant agreements between retailers and credit card processors, such as Visa and MasterCard, that prohibit the practice.

As part of the contract that your local gas station signs with, say, Visa, the station agrees not to charge a surcharge for card use. However, in a bit of semantical legerdemain, the merchant agreement lets the owner offer a cash discount. You still end up paying more with a credit card than with cash, but if you call it a “cash discount,” it’s OK.

According to Visa’s merchant rules,  “… (Y)ou may not impose any surcharge on a Visa transaction. You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.”

In states where the surcharge rule isn’t written into law, consumers who want to report violations by merchants can contact their issuing banks using the numbers listed on the back of their credit cards, or contact the card company — Visa, MasterCard, American Express, Discover — directly.

See related: Some merchants don’t play by the credit card rules

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  • Take my Money Pleeeeeze!

    This is the same state that licenses repair shop buildings but not the mechanics that work in them! Cuomo has nothing better to do and has very little understanding of the real world as it exists in NY. Investigate the rip off credit card merchant services fees. If you are dumb enough to pay for gas on credit so you can get extra points, you deserve what you get for not paying attention at the pumps. Buyer beware. (No, I don’t own a gas station and never did, just fully aware of my surroundings)

  • NedN

    Since I do live on Long Island this has really been popping up a lot recently. I know that it was state law and it’s good that Cuomo is cracking down on it.
    You see on Long Island you drive to less affluent areas as little as 20 miles away and the price of gas is .25 cents lower a gallon, same gas, same brand. Something is wrong with that.

  • Mssteli

    Just last night I went to top off my 1/2 full tank when I saw the price per gallon was $3.65. After I swipe my card I noticed the price change to $3.73 per gallon. I canceled and got back in my car. I won’t be going back there. Bad business move. It’s really just the point after being a customer for so many years now they charge me for the same thing I did for years.

  • PF

    Call 800 996-4630 to report gas stations engaging in this practice!

  • klags

    Is it illegal if the HUGE sign that you can see from the road says one price (cash price 3.89) and the pump then has two prices when you get there? (3.89 CASH, 4.06 CREDIT)
    I feel that the big sign should legally have to display the higher credit price, and then at the pump the cash price should be marked as “discount cash price?”
    Any info would be helpful.

  • Beelf

    Here is the real information.
    Sellers of goods that accept credit and debit cards for payment, have to pay 2 to 5 percent of each credit/debit card sale to the credit card company.
    This gets calculated and added to the price of goods every one pays.
    Because of this, people who pay by cash or check are subsidizing those who use credit cards.
    The Gas stations which charge more for credit are only being fair to consumers who pay cash.
    Why should cash paying customers pay more because others use their cards?
    The Credit Card companies (Banks) give away points.
    Does anyone really believe that these points are Free?
    The law that prevents a credit card surcharge was lobbied for and won by the credit card companies.
    It does not protect consumers!!!
    All it does is disguise the real cost of using credit and debit cards.
    And that is something the credit card companies would prefer to suppress as much as possible.

  • Kenneth Morrissey

    reported 3 last year, a few in the last few months. He does nothing I don’t care what he tells the press. I can’t find any in queens that aren’t doing this.
    There are at least a dozen gas stations in a reasonable direction. Last night I found the last one finally added the gas price BS.

  • some dude

    There’s a gas station in Bellevue WA whose placard says 4.05/gal but a small sign at the pump that says the real price is 4.19 unless you pay by cash. Sounds like the same scam.
    — I hope it isn’t catching on out here.
    Is there a number I can call?

  • Lora Graumenz

    Is it legal for my landlord which is the housing authority to charge a 14% surcharge or transaction fee if I pay my rent with a credit card

    • Moderator

      Hi Lora! Regulations around transaction surcharges are going to differ by state. I would recommend looking up laws for yours! Here’s a post to get you started: . Alternatively, you can use a service like Plastiq to pay your rent with a credit card, which only charges 2.5% for each transaction and cuts a check to your landlord for you.