New York regulates the posted price, not the fee
Most states that address credit card fees either prohibit a surcharge or permit one within a cap. New York does something different, and a merchant who reads the national summaries will miss it. General Business Law section 518 requires a seller who charges a credit card customer more than a cash customer to clearly and conspicuously post the total price for using a credit card in that transaction, inclusive of the surcharge. It then caps the difference: the surcharge may not exceed the amount of the surcharge charged to the business by the credit card company for that credit card use.
Read those two requirements together and the practical rule falls out. The credit card price is the price you must show. A customer standing in front of a menu, a shelf tag or a checkout screen in New York City has to be able to see, before they decide, the number they will actually pay if they hand over a card. Anything that reveals the real credit card total later — at the terminal, on the receipt, in a line item added after the subtotal — is the violation, no matter how prominently you announced that a fee exists.
Three compliant patterns, four that are not
The Division of Consumer Protection published a one-page compliance guide alongside the guidance that took effect on 11 February 2024, and it is unusually direct for a state document. Three things a business can do: display both the credit card price and the cash price clearly, side by side; list the higher credit card price and advertise a discount for cash purchases; or simply use the same price for both cash and credit and absorb the difference.
Four things a business cannot do, per the same guide. It cannot put a sign on the wall or at the register notifying customers that a fee is applied to all credit card sales and leave it there — a notice is not a posted total price. It cannot charge separate line items to credit card users on the customer receipt only, whether they are labelled convenience fee, service fee, administration fee, non-cash adjustment, technology fee or processing fee, without clearly posting the total price prior to purchase. It cannot advertise that all prices include a cash discount that does not apply to credit card purchases. And it cannot put a credit card surcharge warning on the item price tag instead of the credit card price.
That third prohibition is the one that surprises people, because "cash discount" programs are sold hard into New York City and the phrasing sounds like the compliant pattern. It is not. Advertising a single set of prices and telling credit card customers that a discount baked into those prices does not apply to them is not the same as listing a higher credit price and offering a cash discount off it. The first hides the credit total; the second posts it.
The cap is tied to your own cost, which means it is tied to your statement
The statutory ceiling is not a fixed percentage. It is whatever the credit card company charges your business for that credit card use. A merchant who sets a 4 percent surcharge because a sales rep suggested it, without knowing their own cost of acceptance, has no way of demonstrating compliance if asked — and on an interchange-plus account the cost of acceptance is not one number, it varies by card and by transaction. The penalty provision in section 518 is a civil penalty not to exceed five hundred dollars per violation, enforceable by municipal consumer affairs offices and local government attorneys. In New York City, that is the New York City Department of Consumer and Worker Protection, which is an active enforcement body rather than a distant one.
If you run a fee program in the five boroughs, the compliance question and the pricing question are therefore the same question, and both start with knowing your real effective rate. That is total fees divided by total volume on an actual statement, not the headline rate on a quote.