TRENTON – Clarification and the need to prevent unintended consequences are the reasons a bill is needed preventing retailers from issuing surcharges to customers using credit cards.
Assemblyman Gary Schaer, (D-36), of Passaic, said the way the bill is currently written, it would discourage businesses that offer so-called “cash discounts” from doing so to customers.
So at the request of the New Jersey Retail Merchants Association, particularly Executive Director John Holub, the bill was held from a recent voting session, Schaer said.
He said a similar bill in California had done just that.
“We want to explore and clean up the language,” Schaer said.
The bills, S2533/A3743, would only exempt gas stations from providing different prices for customers using credit cards instead of cash.
Holub said the way the bill is written a cash discount could be considered a surcharge under the consumer rights act and could have the unintended consequence of businesses losing customers. The whole point of the bills is to prevent the newly allowed surcharges.
Ultimately, Holub said he would not like to see any bill passed regarding this matter, since none of his members intend to impose the credit card use surcharge on their customers.
But, if the Legislature needs to pass a bill, he would like for there to be language to allow all businesses, not just gas stations, to provide cash discounts.
Cash discounts are commonly provided by such retailers as furniture stores, liquor stores, and car dealerships.
The credit card surcharge issue came to light after a settlement between the largest credit card companies and retailers who were frustrated with high swipe fees.
As part of the settlement, the businesses can issue a 4 percent surcharge to customers that use credit cards. The businesses have to notify the customers of that surcharge.
However, Holub said none of the 3,500 members of the state merchants association intend to have that surcharge.
Schaer said he expects the bill will come up for a vote at a future voting session.