Retail businesses – with the exception of gas stations – would be prohibited from charging a surcharge for patrons paying with a credit card under a bill moved through the Assembly Financial Institutions and Insurance Committee today.
The bill A3743, sponsored by Assemblyman Vincent Prieto and Assemblywomen Angelica Jimenez and Connie Wagner, passed the committee by a vote of five to one.
The bill allows gas merchants to sell fuel at a different cost to cash and credit customers.
The ability for a retailer to impose a surcharge stems from a lawsuit filed by retail merchants to lower so-called “swipe fees” imposed by credit card companies on merchants who accept their cards.
However a representative of the Retail Merchants Association told members of the committee that his members have no intention of adding fees to their prices because it would be anti-competitive.
“Not only do retailers have no intention of charging surcharges, but it conflicts with the very intent of the lawsuit, which was to lower ‘swipe fees,’” said John Holub of the New Jersey Retail Merchants Association.
Holub told the committee that exempting gas stations would prohibit the use of “cash discounts” because it would define the discount as a surcharge.
“Now any retailer that currently offers a cash discount will no longer be able to do so, which will ultimately hurt the consumer,” Holub said.
Assemblyman John McKeon said he was in favor of allowing cash discounts as a way to stave off interest charges and credit card debt.
Assemblyman John Wisniewski told committee members he believes prohibiting surcharges could have the unintended effect of driving up costs for both cash and credit consumers.
“Businesses will just wrap that cost into the overhead and charge the consumer a higher rate whether it’s a cash or credit purchase,” he said.
But Committee Chairman Assemblyman Gary Schaer, the sponsor of a similar bill, said he believes those costs are already factored into the prices, so prohibiting the surcharge would keep the cost from being factored in twice.