Laws in New York and nine other states that ban merchants from imposing credit card "surcharges" but usually allow cash "discounts" have been discussed by the Supreme Court.
The problem was deciding if New York's law regulates prices or speech, leaving many of them inclined to stay out of the issue and send it back to state courts.
Merchants that disagree with the law want the right to tell customers that they will charge credit card purchasers extra because of the "swipe fees" that get handed down from credit card companies to retailers and, many times, to consumers.
A pastrami sandwich can be priced four ways
State officials defending the law declare it is aimed at protecting consumers from being charged more than the listed prices.
The preferred example was the pastrami sandwich, which can be priced four ways.
Under the law, merchants can list the price as $10 for customers who pay in cash, and $10.20 if consumers pay with credit card, or it can cost $10.20 with a 20-cent "discount" for cash consumers. But they cannot list it as $10 with a 2% "surcharge" for credit-card purchases.
New York states the law is aimed at pricing prices, not speech
Merchants, led by Expressions Hair Design, believe that the New York law violates their First Amendment rights because it prohibits them from labeling higher credit card prices as a surcharge. As a free speech case, the law would be harder to defend.
New York states the law is aimed at pricing practices, not speech, and therefore it falls within its authority. Steven Wu, the state's deputy solicitor general, declared New York wants to stop merchants from advertising one price and then adding to it.
The main purpose of the law is protect customers.
