Senate Bill S7267C

2009-2010 Legislative Session

Prohibits the imposition of a surcharge by a seller in a sales transaction on a holder who uses a debit card

download bill text pdf

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 30, 2010	referred to consumer affairs and protection delivered to assembly passed senate
Jun 29, 2010	ordered to third reading cal.1339
Jun 24, 2010	print number 7267c
Jun 24, 2010	amend and recommit to rules
Jun 23, 2010	committee discharged and committed to rules
Jun 18, 2010	print number 7267b
Jun 18, 2010	amend and recommit to consumer protection
Jun 16, 2010	print number 7267a
Jun 16, 2010	amend and recommit to consumer protection
Mar 26, 2010	referred to consumer protection

Votes

- Jun 30, 2010 - Floor Vote
  S7267C
  
  Aye
  
  61
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  1
  
  Abstained
  
  0
  - - Floor Vote: Jun 30, 2010
      
      aye (61)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Aubertine
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Espada
      
      Farley
      
      Flanagan
      
      Foley
      
      Fuschillo
      
      Golden
      
      Griffo
      
      Hannon
      
      Hassell-Thompson
      
      Huntley
      
      Johnson
      
      Johnson
      
      Klein
      
      Krueger
      
      Kruger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Leibell
      
      Libous
      
      Little
      
      Marcellino
      
      Maziarz
      
      McDonald
      
      Montgomery
      
      Nozzolio
      
      Onorato
      
      Oppenheimer
      
      Padavan
      
      Parker
      
      Peralta
      
      Perkins
      
      Ranzenhofer
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Schneiderman
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stachowski
      
      Stavisky
      
      Stewart-Cousins
      
      Thompson
      
      Valesky
      
      Volker
      
      Winner
      
      Young
      
      excused (1)
      
      Morahan
  Jun 29, 2010 - Rules Committee Vote
  S7267C
  
  Aye
  
  19
  
  Nay
  
  1
  
  Aye with Reservations
  
  3
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  
  0
  - - Rules Committee Vote: Jun 29, 2010
      
      aye (19)
      
      Dilan
      
      Espada
      
      Farley
      
      Hassell-Thompson
      
      Johnson
      
      Klein
      
      Krueger
      
      LaValle
      
      Larkin
      
      Montgomery
      
      Padavan
      
      Parker
      
      Saland
      
      Serrano
      
      Skelos
      
      Smith
      
      Stachowski
      
      Stewart-Cousins
      
      Valesky
      
      nay (1)
      
      Volker
      
      aye wr (3)
      
      Duane
      
      Hannon
      
      Seward

Bill Amendments

co-Sponsors

View additional co-sponsors

2009-S7267 - Details

Current Committee:: Assembly Consumer Affairs And Protection
Law Section:: General Business Law
Laws Affected:: Amd §518, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:: S1019

2009-S7267 - Summary

Prohibits the imposition of a surcharge by a seller in a sales transaction on a holder who uses a debit card.

2009-S7267 - Sponsor Memo

                                 BILL NUMBER:  S7267

 TITLE OF BILL :

An act to amend the general business law, in relation to prohibiting
the imposition of a surcharge by a seller in a sales transaction on a
holder who uses a debit card


 PURPOSE :

This legislation would prohibit merchants from imposing surcharges on
consumers who elect to pay with a debit card and would clarify that
merchants may offer discounts to induce consumers to make payments
with means other than credit cards.

 SUMMARY OF PROVISIONS :

This legislation would create three subdivisions in section 518 of the
general business law, numbering the current paragraphs as subdivisions
1 and 2, and adding subdivision 3 allowing merchants to offer
discounts to induce customers to make payments with means other than
credit cards.

 JUSTIFICATION :

One of the core tenets of the consumer experience is that the stated
price of an item as advertised is the actual price paid at checkout.
This fundamental consumer protection has been recognized by governing
bodies around the world, and is a core element in New York's deceptive
acts and practices statute. It is inexcusable to allow retailers to
use the lure of lower advertised prices to entice customers and then
to charge them more.

Retailers are currently prohibited from imposing surcharges on
consumers who use credit cards; this prohibition must be updated and
extended to debit cards.  Electronic payment allows consumers to
conveniently, securely and responsibly manage their finances.
Surcharges and checkout fees hurt consumers and must be outlawed.

Retailers enjoy the same benefits from debit card use as they do from
credit card use. For example, lines move faster because customers
don't have to pull out their checkbook or fumble for cash. In
addition, customers spend more, and the payments are immediately
guaranteed. Bad check losses are eliminated.

Allowing retailers to surcharge would force customers to pay for the
benefits that merchants receive, shifting 100 percent of the cost of
electronic payments to consumers. In fact, surcharging could
essentially become an unearned profit center for retailers. The
benefits and savings that cards offer will be undermined if retailers
are allowed to surcharge and drive consumers to use cash and checks.

 LEGISLATIVE HISTORY :

This is a new bill.

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect on the one hundred twentieth day after it
shall have become a law.

2009-S7267 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7267

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sens. SCHNEIDERMAN, FOLEY, HUNTLEY, KRUEGER, MONTGOMERY,
  PERALTA -- read twice and ordered printed,  and  when  printed  to  be
  committed to the Committee on Consumer Protection

AN ACT to amend the general business law, in relation to prohibiting the
  imposition  of  a  surcharge  by  a seller in a sales transaction on a
  holder who uses a debit card

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 518 of the general business law, as added by chap-
ter 160 of the laws of 1984, is amended to read as follows:
  S 518. [Credit] PAYMENT card surcharge prohibited. 1. No seller in any
sales transaction may impose a surcharge on a holder who elects to use a
credit card OR DEBIT CARD in lieu of payment by cash, check, or  similar
means.    FOR  PURPOSES OF THIS SECTION, "DEBIT CARD" INCLUDES A PREPAID
CARD OR OTHER MEANS OF ACCESS TO PREPAID  FUNDS  THAT  MAY  BE  USED  TO
INITIATE ELECTRONIC FUNDS TRANSFERS AND MAY BE USED WITHOUT UNIQUE IDEN-
TIFYING INFORMATION SUCH AS A PERSONAL IDENTIFICATION NUMBER TO INITIATE
ACCESS TO PREPAID FUNDS.
  2.  Any  seller  who  violates the provisions of this section shall be
guilty of a misdemeanor punishable by a fine not to exceed five  hundred
dollars or a term of imprisonment up to one year, or both.
  3.  NOTHING  IN  THIS  SECTION SHALL PROHIBIT ANY SELLER FROM OFFERING
DISCOUNTS TO A BUYER TO INDUCE SUCH A BUYER TO PAY BY CASH, DEBIT  CARD,
CHECK,  OR  SIMILAR  MEANS  RATHER  THAN BY CREDIT CARD OR DEBIT CARD IF
OFFERED TO ALL PROSPECTIVE BUYERS AND DISCLOSED CLEARLY AND CONSPICUOUS-
LY.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law.



 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16246-04-0

co-Sponsors

View additional co-sponsors

2009-S7267A - Details

Current Committee:: Assembly Consumer Affairs And Protection
Law Section:: General Business Law
Laws Affected:: Amd §518, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:: S1019

2009-S7267A - Summary

Prohibits the imposition of a surcharge by a seller in a sales transaction on a holder who uses a debit card.

2009-S7267A - Sponsor Memo

                                BILL NUMBER:S7267A

TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting the
imposition of a surcharge by a seller in a sales transaction on a holder
who uses a debit card

PURPOSE:
This legislation would prohibit merchants from imposing surcharges on
consumers who elect to pay with a debit card and would clarify that
merchants may offer discounts to induce consumers to make payments with
means other than credit cards.

SUMMARY OF PROVISIONS:
This legislation would create five subdivisions in section 518 of the
general business law, allowing merchants to offer discounts to induce
customers to make payments with means other than credit cards.  Further,
any franchisor or electronic pa.yment system that collects a fee for
payments using debit cards shall reimburse all affected merchants for
fees and fines collected and may be liable for a civil penalty of $5,000
per fee or fine levied.

JUSTIFICATION:
One of the core tenets of the consumer experience is that the stated
price of an item as advertised is the actual price paid at checkout.
This fundamental consumer protection has been recognized by governing

bodies around the world, and is a core element in New York's deceptive
acts and practices statute. It is inexcusable to allow retailers to use
the lure of lower advertised prices to entice customers and then to
charge them more.

Retailers are currently prohibited from imposing surcharges on consumers
who use credit cardsj this prohibition must be updated and extended to
debit cards. Electronic payment allows consumers to conveniently,
securely and responsibly manage their finances.  Surcharges and checkout
fees hurt consumers and must be outlawed.

Retailers enjoy the same benefits from debit card use as they do from
credit card use. For example, lines move faster because customers don't
have to pull out their checkbook or fumble for cash. In addition,
customers spend more, and the payments are immediately guaranteed. Bad
check losses are eliminated.

Allowing retailers to surcharge would force customers to pay for the
benefits that merchants receive, shifting 100 percent of the cost of
electronic payments to consumers. In fact, surcharging could essentially
become an unearned profit center for retailers. The benefits and savings
that cards offer will be undermined if retailers are allowed to
surcharge and drive consumers to use cash and checks.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
One hundred twentieth day after it shall have become a law.

2009-S7267A - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7267--A

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sens. SCHNEIDERMAN, FOLEY, HUNTLEY, KRUEGER, MONTGOMERY,
  PERALTA -- read twice and ordered printed,  and  when  printed  to  be
  committed  to  the  Committee  on  Consumer  Protection  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN ACT to amend the general business law, in relation to prohibiting the
  imposition of a surcharge by a seller in  a  sales  transaction  on  a
  holder who uses a debit card

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 518 of the general business law, as added by  chap-
ter 160 of the laws of 1984, is amended to read as follows:
  S 518. [Credit] PAYMENT card surcharge prohibited.  1. A. No seller in
any  sales  transaction may impose a surcharge on a holder who elects to
use a credit card OR DEBIT CARD in lieu of payment by  cash,  check,  or
similar  means.  FOR  PURPOSES  OF THIS SECTION, "DEBIT CARD" INCLUDES A
PREPAID CARD OR OTHER MEANS OF ACCESS TO PREPAID FUNDS THAT MAY BE  USED
TO  INITIATE  ELECTRONIC  FUNDS TRANSFERS AND MAY BE USED WITHOUT UNIQUE
IDENTIFYING INFORMATION SUCH AS  A  PERSONAL  IDENTIFICATION  NUMBER  TO
INITIATE ACCESS TO PREPAID FUNDS.
  B.  A  SELLER  IN ANY SALES TRANSACTION IN WHICH A HOLDER USES A DEBIT
CARD AND, UPON THE HOLDER'S REQUEST, RECEIVES FROM THE SELLER CASH IN AN
AMOUNT EXCEEDING THE COST OF GOODS OR SERVICES PURCHASED IN  THE  TRANS-
ACTION  MAY  IMPOSE  A  SURCHARGE  IF  THE  AMOUNT  OF SUCH SURCHARGE IS
DISCLOSED CLEARLY AND CONSPICUOUSLY PRIOR TO THE TRANSACTION.
  2. Any seller who violates the provisions of  this  section  shall  be
guilty  of a misdemeanor punishable by a fine not to exceed five hundred
dollars or a term of imprisonment up to one year, or both.
  3. NO FRANCHISOR OR ELECTRONIC PAYMENT SYSTEM SHALL EITHER DIRECTLY OR
THROUGH ANY AGENT, PROCESSOR, OR MEMBER OF THE SYSTEM, PROHIBIT A SELLER
FROM OFFERING DISCOUNTS TO A BUYER TO INDUCE SUCH  A  BUYER  TO  PAY  BY
CASH,  DEBIT CARD, CHECK, OR OTHER SPECIFIED MEANS RATHER THAN BY CREDIT
CARD, DEBIT CARD OR OTHER FORM OF PAYMENT IF OFFERED TO ALL  PROSPECTIVE
BUYERS AND DISCLOSED CLEARLY AND CONSPICUOUSLY.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD16246-09-0

S. 7267--A                          2

  4.  NO ELECTRONIC PAYMENT SYSTEM SHALL, DIRECTLY OR THROUGH ANY AGENT,
PROCESSOR, OR MEMBER OF THE SYSTEM PREVENT ANY MERCHANT FROM  SETTING  A
MINIMUM  DOLLAR  VALUE  GREATER  THAN  OR  EQUAL  TO TEN DOLLARS FOR ITS
ACCEPTANCE OF A FORM OF PAYMENT.
  5.  ANY FRANCHISOR OR ELECTRONIC PAYMENT SYSTEM FOUND TO HAVE VIOLATED
THE PROVISIONS OF THIS SECTION SHALL REIMBURSE  ALL  AFFECTED  MERCHANTS
FOR  ALL  FEES  AND  FINES COLLECTED FROM AFFECTED MERCHANTS DIRECTLY OR
THROUGH ANY AGENT, PROCESSOR, OR MEMBER OF THE SYSTEM DURING THE  PERIOD
OF  TIME  IN WHICH THE ELECTRONIC PAYMENT SYSTEM WAS IN VIOLATION AND BE
LIABLE FOR A CIVIL PENALTY OF FIVE THOUSAND  DOLLARS  PER  FEE  OR  FINE
LEVIED IN VIOLATION OF THIS SECTION.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law.

co-Sponsors

View additional co-sponsors

2009-S7267B - Details

Current Committee:: Assembly Consumer Affairs And Protection
Law Section:: General Business Law
Laws Affected:: Amd §518, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:: S1019

2009-S7267B - Summary

Prohibits the imposition of a surcharge by a seller in a sales transaction on a holder who uses a debit card.

2009-S7267B - Sponsor Memo

                                BILL NUMBER:S7267B

TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
the imposition of a surcharge by a seller in a sales transaction on a
holder who uses a debit card

PURPOSE:
This legislation would prohibit merchants from imposing surcharges on
consumers who elect to pay with a debit card and would clarify that
merchants may offer discounts to induce consumers to make payments
with means other than credit cards.

SUMMARY OF PROVISIONS:
This legislation would create six subdivisions in section 518 of the
general business law, allowing merchants to offer discounts to induce
customers to make payments with means other than debit or credit
cards.  Further, any franchisor or electronic payment system that
collects a fee for payments using debit cards shall reimburse all
affected merchants for the fees and fines collected and may be liable
for a civil penalty of twice the fee or fine levied.

JUSTIFICATION:
One of the core tenets of the consumer experience is that the stated
price of an item as advertised is the actual price paid at checkout.
This fundamental consumer protection has been recognized by governing

bodies around the world, and is a core element in New York's deceptive
acts and practices statute. It is inexcusable to allow retailers to
use the lure of lower advertised prices to entice customers and then
to charge them more.

Retailers are currently prohibited from imposing surcharges on
consumers who use credit cards. This prohibition must be updated and
extended to debit cards. Electronic payment allows consumers to
conveniently, securely and responsibly manage their finances.
Surcharges and checkout fees hurt consumers and must be outlawed.

Retailers enjoy the same benefits from debit card use as they do from
credit card use. For example, lines move faster because customers
don't have to pullout their checkbook or fumble for cash. In addition,
customers spend more, and the payments are immediately guaranteed. Bad
check losses are eliminated.

Allowing retailers to surcharge would force customers to pay for the
benefits that merchants receive, shifting 100 percent of the cost of
electronic payments to consumers. In fact, surcharging could
essentially become an unearned profit center for retailers. The
benefits and savings that cards offer will be undermined if retailers
are allowed to surcharge and drive consumers to use cash and checks.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None.


EFFECTIVE DATE:
One hundred twentieth day after it shall have become a law.

2009-S7267B - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7267--B

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sens. SCHNEIDERMAN, FOLEY, HUNTLEY, KRUEGER, MONTGOMERY,
  PERALTA -- read twice and ordered printed,  and  when  printed  to  be
  committed  to  the  Committee  on  Consumer  Protection  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the general business law, in relation to prohibiting the
  imposition  of  a  surcharge  by  a seller in a sales transaction on a
  holder who uses a debit card

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 518 of the general business law, as added by chap-
ter 160 of the laws of 1984, is amended to read as follows:
  S 518. [Credit] PAYMENT card surcharge prohibited.   1. No  seller  in
any  sales  transaction may impose a surcharge on a holder who elects to
use a credit card OR DEBIT CARD in lieu of payment by  cash,  check,  or
similar  means.  FOR  PURPOSES  OF THIS SECTION, "DEBIT CARD" INCLUDES A
PREPAID CARD OR OTHER MEANS OF ACCESS TO PREPAID FUNDS THAT MAY BE  USED
TO  INITIATE  ELECTRONIC  FUNDS TRANSFERS AND MAY BE USED WITHOUT UNIQUE
IDENTIFYING INFORMATION SUCH AS  A  PERSONAL  IDENTIFICATION  NUMBER  TO
INITIATE ACCESS TO PREPAID FUNDS.
  2. NOTHING IN THIS SECTION SHALL PROHIBIT ANY SELLER FROM:
  A.  OFFERING  DISCOUNTS TO A BUYER TO INDUCE THE BUYER TO PAY BY CASH,
CHECK, DEBIT CARD, OR SIMILAR MEANS RATHER THAN BY CREDIT CARD OR  DEBIT
CARD,  IF  SUCH  DISCOUNTS  ARE  OFFERED  TO  ALL PROSPECTIVE BUYERS AND
DISCLOSED CLEARLY AND CONSPICUOUSLY;
  B. IMPOSING A SURCHARGE ON A HOLDER WHO, IN CONNECTION WITH  A  CREDIT
CARD  OR  DEBIT CARD TRANSACTION, RECEIVES CASH BACK BEYOND THE PURCHASE
AMOUNT OF THE SALES TRANSACTION, BUT SUCH SURCHARGE MAY ONLY BE  APPLIED
IF  DISCLOSED  CLEARLY  AND  CONSPICUOUSLY  TO  THE  HOLDER PRIOR TO THE
COMPLETION OF THE TRANSACTION AND ONLY APPLIED TO  THE  AMOUNT  OF  CASH
BACK PROVIDED BY THE SELLER; OR
  C.  ACCEPTING  A  CREDIT  CARD  OR DEBIT CARD AS PAYMENT ONLY WHEN THE
PAYMENT AMOUNT IS FIVE DOLLARS OR GREATER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD16246-11-0

S. 7267--B                          2

  3. NO PERSON MAY PROHIBIT A SELLER FROM:
  A.  OFFERING DISCOUNTS TO A BUYER TO INDUCE PAYMENT BY CASH, CHECK, OR
SIMILAR MEANS RATHER THAN BY CREDIT CARD OR DEBIT CARD IF SUCH DISCOUNTS
ARE CONSISTENT WITH THE REQUIREMENTS OF THIS SECTION; OR
  B. NOT ACCEPTING A CREDIT CARD OR  DEBIT  CARD  AS  PAYMENT  WHEN  THE
PAYMENT AMOUNT IS LESS THAN FIVE DOLLARS.
  4.  AN  ELECTRONIC  PAYMENT  SYSTEM  MAY  NOT, DIRECTLY OR THROUGH ANY
AGENT, PROCESSOR, OR MEMBER OF  SUCH  SYSTEM,  IMPOSE  ANY  REQUIREMENT,
CONDITION,  PENALTY, OR FINE IN A CONTRACT WITH A SELLER RELATING TO THE
DISPLAY, AT THE POINT OF SALE, OF PRICING FOR GOODS OR SERVICES  OFFERED
BY  SELLER, INCLUDING A DISPLAY RELATING TO A DISCOUNT TO INDUCE PAYMENT
BY CASH, CHECK, OR SIMILAR MEANS. THIS PROHIBITION SHALL NOT APPLY  WITH
RESPECT  TO  THE  DISPLAY OF PRICING FOR GOODS OR SERVICES IN ADVERTISE-
MENTS.
  5. Any seller who violates the provisions of  this  section  shall  be
guilty  of a misdemeanor punishable by a fine not to exceed five hundred
dollars or a term of imprisonment up to one year, or both.
  6. IF AN ELECTRONIC PAYMENT SYSTEM IMPOSES A FINE ON AN ACQUIRER  THAT
RESULTS  IN  THE PAYMENT BY A SELLER THAT VIOLATES ANY PROVISION OF THIS
SECTION, THE ELECTRONIC PAYMENT SYSTEM SHALL BE LIABLE TO THE SELLER FOR
THE AMOUNT OF ANY SUCH FINE  PAID  BY  THE  SELLER,  AND,  IN  ADDITION,
SUBJECT TO A CIVIL PENALTY UP TO TWICE THE AMOUNT OF SUCH FINE.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law.

co-Sponsors

View additional co-sponsors

2009-S7267C (ACTIVE) - Details

Current Committee:: Assembly Consumer Affairs And Protection
Law Section:: General Business Law
Laws Affected:: Amd §518, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:: S1019

2009-S7267C (ACTIVE) - Summary

Prohibits the imposition of a surcharge by a seller in a sales transaction on a holder who uses a debit card.

2009-S7267C (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7267C

TITLE OF BILL:
An act
to amend the general business law, in relation to prohibiting the
imposition of a surcharge by a seller in a sales transaction on a holder
who uses a debit card

PURPOSE:
This legislation would prohibit merchants from imposing surcharges on
consumers who elect to pay with a debit card and would clarify that
merchants may offer discounts to induce consumers to make payments
with means other than credit cards.

SUMMARY OF PROVISIONS:
This legislation would create six subdivisions in section 518 of the
general business law, allowing merchants to offer discounts to induce
customers to make payments with means other than debit or credit cards.
Further, any franchisor or electronic payment system that collects a
fee for payments using debit cards shall reimburse all affected
merchants for the fees and fines collected and may be liable for a
civil penalty of twice the fee or fine levied.

JUSTIFICATION:
One of the core tenets of the consumer experience is that the stated
price of an item as advertised is the actual price paid at checkout.

This fundamental consumer protection has been recognized by governing
bodies around the world, and is a core element in New York's
deceptive acts and practices statute. It is inexcusable to allow
retailers to use the lure of lower advertised prices to entice
customers and then to charge them more.

Retailers are currently prohibited from imposing surcharges on
consumers who use credit cards. This prohibition must be updated and
extended to debit cards. Electronic payment allows consumers to
conveniently, securely and responsibly manage their finances.
Surcharges and checkout fees hurt consumers and must be outlawed.

Retailers enjoy the same benefits from debit card use as they do from
credit card use. For example, lines move faster because customers
don't have to pullout their checkbook or fumble for cash. In
addition, customers spend more, and the payments are immediately
guaranteed. Bad check losses are eliminated.

Allowing retailers to surcharge would force customers to pay for the
benefits that merchants receive, shifting 100 percent of the cost of
electronic payments to consumers. In fact, surcharging could
essentially become an unearned profit center for retailers. The
benefits and savings that cards offer will be undermined if retailers
are allowed to surcharge and drive consumers to use cash and checks.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
One hundred twentieth day after it shall have become a law.

2009-S7267C (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7267--C

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sens. SCHNEIDERMAN, FOLEY, HUNTLEY, KRUEGER, MONTGOMERY,
  PERALTA -- read twice and ordered printed,  and  when  printed  to  be
  committed  to  the  Committee  on  Consumer  Protection  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee  --  committee  discharged,  bill  amended,  ordered
  reprinted  as  amended  and  recommitted to said committee -- reported
  favorably from said committee and committed to the Committee on  Rules
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

AN ACT to amend the general business law, in relation to prohibiting the
  imposition of a surcharge by a seller in  a  sales  transaction  on  a
  holder who uses a debit card

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 518 of the general business law, as added by  chap-
ter 160 of the laws of 1984, is amended to read as follows:
  S  518.  [Credit]  PAYMENT card surcharge prohibited.  1. No seller in
any sales transaction may impose a surcharge on a holder who  elects  to
use  a  credit  card OR DEBIT CARD in lieu of payment by cash, check, or
similar means. FOR PURPOSES OF THIS SECTION,  "DEBIT  CARD"  INCLUDES  A
PREPAID  CARD OR OTHER MEANS OF ACCESS TO PREPAID FUNDS THAT MAY BE USED
TO INITIATE ELECTRONIC FUNDS TRANSFERS AND MAY BE  USED  WITHOUT  UNIQUE
IDENTIFYING  INFORMATION  SUCH  AS  A  PERSONAL IDENTIFICATION NUMBER TO
INITIATE ACCESS TO PREPAID FUNDS.
  2. NOTHING IN THIS SECTION SHALL PROHIBIT ANY SELLER FROM:
  A. OFFERING DISCOUNTS TO A BUYER TO INDUCE THE BUYER TO PAY  BY  CASH,
CHECK,  DEBIT CARD, OR SIMILAR MEANS RATHER THAN BY CREDIT CARD OR DEBIT
CARD, IF SUCH DISCOUNTS  ARE  OFFERED  TO  ALL  PROSPECTIVE  BUYERS  AND
DISCLOSED CLEARLY AND CONSPICUOUSLY; OR
  B.  IMPOSING  A SURCHARGE ON A HOLDER WHO, IN CONNECTION WITH A CREDIT
CARD OR DEBIT CARD TRANSACTION, RECEIVES CASH BACK BEYOND  THE  PURCHASE
AMOUNT  OF THE SALES TRANSACTION, BUT SUCH SURCHARGE MAY ONLY BE APPLIED
IF DISCLOSED CLEARLY AND  CONSPICUOUSLY  TO  THE  HOLDER  PRIOR  TO  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16246-13-0

S. 7267--C                          2

COMPLETION  OF  THE  TRANSACTION  AND ONLY APPLIED TO THE AMOUNT OF CASH
BACK PROVIDED BY THE SELLER.
  3. NO PERSON MAY PROHIBIT A SELLER FROM:
  A.  OFFERING  DISCOUNTS  TO  A BUYER TO INDUCE PAYMENT BY CASH, CHECK,
DEBIT CARD OR SIMILAR MEANS RATHER THAN BY CREDIT CARD OR DEBIT CARD  IF
SUCH DISCOUNTS ARE CONSISTENT WITH THE REQUIREMENTS OF THIS SECTION; OR
  B.  IMPOSING  A SURCHARGE ON A HOLDER WHO, IN CONNECTION WITH A CREDIT
CARD OR DEBIT CARD TRANSACTION, RECEIVES CASH BACK BEYOND  THE  PURCHASE
AMOUNT  OF THE SALES TRANSACTION, BUT SUCH SURCHARGE MAY ONLY BE APPLIED
IF DISCLOSED CLEARLY AND  CONSPICUOUSLY  TO  THE  HOLDER  PRIOR  TO  THE
COMPLETION  OF  THE  TRANSACTION  AND ONLY APPLIED TO THE AMOUNT OF CASH
BACK PROVIDED BY THE SELLER.
  4. AN ELECTRONIC PAYMENT SYSTEM  MAY  NOT,  DIRECTLY  OR  THROUGH  ANY
AGENT,  PROCESSOR,  OR  MEMBER  OF  SUCH SYSTEM, IMPOSE ANY REQUIREMENT,
CONDITION, PENALTY, OR FINE IN A CONTRACT WITH A SELLER RELATING TO  THE
DISPLAY,  AT THE POINT OF SALE, OF PRICING FOR GOODS OR SERVICES OFFERED
BY SELLER, INCLUDING A DISPLAY RELATING TO A DISCOUNT TO INDUCE  PAYMENT
BY  CASH, CHECK, OR SIMILAR MEANS. THIS PROHIBITION SHALL NOT APPLY WITH
RESPECT TO THE DISPLAY OF PRICING FOR GOODS OR  SERVICES  IN  ADVERTISE-
MENTS.
  5.  Any  seller  who  violates the provisions of this section shall be
guilty of a misdemeanor punishable by a fine not to exceed five  hundred
dollars or a term of imprisonment up to one year, or both.
  6.  IF AN ELECTRONIC PAYMENT SYSTEM IMPOSES A FINE ON AN ACQUIRER THAT
RESULTS IN THE PAYMENT BY A SELLER THAT VIOLATES ANY PROVISION  OF  THIS
SECTION, THE ELECTRONIC PAYMENT SYSTEM SHALL BE LIABLE TO THE SELLER FOR
THE  AMOUNT  OF  ANY  SUCH  FINE  PAID  BY THE SELLER, AND, IN ADDITION,
SUBJECT TO A CIVIL PENALTY UP TO TWICE THE AMOUNT OF SUCH FINE.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law.

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Senate Bill S7267C

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Archive: Last Bill Status - In Assembly Committee

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2009-S7267A - Details

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