Credit cards continue to be a hot payment topic for suppliers, given their expense and
preferred payment form by customers. More suppliers are rolling out surcharge
programs as a way to make credit cards margin competitive with other payment forms.
Ten states have enacted no-surcharge laws, which are intended to bar merchants from
surcharging, raising the question whether suppliers may surcharge in these states for
B2B sales. The constitutionality of no-surcharge laws has been heavily litigated. The
Courts of Appeals for the 2nd, 5th and 11th Circuits each issued rulings on the right to
surcharge, and in October, 2016, the U.S. Supreme Court accepted the 2nd Circuit's
request to rule on the enforceability of New York's no-surcharge law. On Wednesday,
March 29, the U.S. Supreme Court vacated the 2nd Circuit Court of Appeal's decision
upholding New York's no-surcharge law. This discussion will address the Supreme
Court's ruling and how it may shape a supplier's surcharge strategy.
Scott Blakeley, Esq., is a founder of Blakeley & Blakeley LLP, where he advises
companies around the United States and Canada regarding creditors' rights,
commercial law, e-commerce and bankruptcy law.