Attorney General Matthew J. Platkin today announced that four businesses throughout the state have been issued notices of violation for either not accepting cash or for charging a credit card surcharge without properly notifying consumers. Merchants in New Jersey must give consumers the option to pay cash. Merchants must also disclose total selling price—including any surcharges for using credit cards, debit cards, or pre-paid cards.
In recent months the Division of Consumer Affairs’ Office of Consumer Protection (“the Division”) received and investigated dozens of complaints from Garden State residents regarding businesses that either charged consumers fees for using credit cards, debit cards, or pre-paid cards without clearly disclosing such fees or that did not accept cash offered by consumers as payment. The New Jersey Consumer Fraud Act (“CFA”) states: “a person selling or offering for sale goods or services at retail shall not require a buyer to pay using credit or prohibit cash as payment in order to purchase the goods or services.” N.J.S.A. 56:8-2.33(a).
Businesses are allowed to charge card surcharges, but the CFA requires establishments to disclose that they are passing the fees, and the amount, to consumers (which can be stated as a percentage) before the customer is charged. The CFA prohibits the sale of “any merchandise at retail unless the total selling price of such merchandise is plainly marked by a stamp, tag, label or sign either affixed to the merchandise or located at the point where the merchandise is offered for sale.” N.J.S.A. 56:8-2.5.
“New Jersey consumers deserve to know exactly how much they will be paying when they go to a store and be able to pay however they can,” said Attorney General Platkin. “Many consumers from underrepresented communities do not have access to bank accounts or credit cards. Laws requiring businesses to accept cash protect those consumers and ensure social equity in stores throughout the state.”
“While the law permits businesses to charge card surcharges, it also requires businesses to be transparent with consumers and disclose those fees prior to purchase,” said Division of Consumer Affairs Acting Director Cari Fais. “The law also protects consumers’ right to pay for goods and services with cash. The enforcement actions the Division has recently taken will make sure store owners do not forget their responsibilities to consumers under the law.”
A Notice of Violation for not accepting cash as a payment was issued to Skyviews of America, LLC which operates the Dream Wheel at the American Dream Mall in East Rutherford, NJ, for requiring customers wishing to pay cash to ride the Dream Wheel to purchase gift cards from another merchant, which included a surcharge, in order to use cash. The NOV they were issued included a $1,000 civil penalty.
Two NOVs for not accepting cash were also issued to Hidden Grounds Coffee which settled with the Division to resolve its alleged CFA violation. The business agreed to pay a civil penalty of $2,000 and, among other things, to accept cash as a method of payment and minimize any inconvenience for cash-paying customers. Hidden Grounds Coffee also agreed to distribute a summary of the Consent Order to management responsible for oversight and training of employees at its retail locations within the State.
Notices of Violation for not disclosing card surcharges were issued to Ronnie’s Hot Bagels in Hillsdale, and Seymour’s Café in Clifton. Both businesses were alleged to be in violation of the CFA by failing to disclose card surcharges before consumers ordered, instead, the businesses disclosed the charge on a receipt after accepting payment. Each NOV includes a $500 civil penalty.
Each instance of failing to notify a consumer of a card surcharge or charging more for merchandise than the displayed price may constitute a separate violation of New Jersey’s Consumer Fraud Act. Violators are subject to a maximum penalty of $10,000 for the first violation and $20,000 for each subsequent violation, pursuant to N.J.S.A. 56:8-13. Not accepting cash as a payment is subject to a maximum penalty of $2,500 for the first violation.
How Consumers Can Protect Their Pockets:
Check the receipt to make sure the price charged matches the advertised or posted price of an item (plus tax, if applicable).
Look for the merchant to display full price (excluding tax) using each method of payment accepted. For example, the merchant should display the full price if the customer pays in cash and display the amount that will be charged if a card surcharge applies, which can be stated as a percentage.
Be wary of card surcharges that exceed the actual incremental cost of the processing fee, which is typically around 1-5%.
Consumers who believe that a business is in violation of the New Jersey Consumer Fraud Act, are encouraged to file an online complaint. Consumers can also call 1-800-242-5846 to receive a complaint form by mail.