First Monday In October — Credit Fees Get Their Day in Court
The First Monday in October is, famously, the start of business for each Supreme Court session. This particular court, of course, remains in a 4-4 ideological tie until the Senate decides it might be time to go to work and confirm a judge for the current vacancy.
Case before the Court
Most of that would remain beyond the scope of this particular blog, except that court has agreed to hear a case deciding “the fate of laws in 10 states that limit how merchants can describe the lower prices they charge for cash transactions.”
As Bloomberg News recounts, “the Court let it be know it will hear a retailer challenge to a New York law that bars stores from saying they are imposing surcharges on credit-card purchases. Retailers instead must say they are offering discounts to people who pay with cash or debit cards. Retailers say the distinction is more than a semantic one given the tens of billions of dollars in ‘swipe fees’ they pay every year to credit-card companies. Merchants say they would discourage card use — and reduce those fees — if they were allowed to impose straightforward surcharges on credit purchases.”
State Bans on Surcharges
Conversely, according to the Reuters overview, state bans on such surcharges are there, according to various state attorneys general, to “protect consumers, letting customers rely on a retailer’s posted prices rather than be surprised at checkout, when they may resist changing their minds about purchases…The laws prevent retailers from adding a $2 surcharge but allow them to give ‘discounts’ to cash customers equivalent to the surcharge amount.”
Timeline and Implications
As the Pymnts.com website notes, though, arguments on this case won’t even begin until 2017, and the decision isn’t expected until next June — the end of the current term. There might even be a ninth appointed Justice by then!
Significance and Opinions
Pymnts summarizes the entire imbroglio as an issue on issue on “whether the no-surcharge mandates are a form of free speech or whether the law is a way to steer consumer conduct.”
They also quote William Mellin, CEO of the New York Credit Union Association as saying: “We know from experience that, when merchants are allowed to charge credit card surcharges, the result is more expensive products for everyone, not cheaper products for cash users. The decision by the Supreme Court to hear this case will provide nationwide clarity about the ability of legislatures to ensure consumers are treated fairly, regardless of which payment method they use.”
Choose AVPS for Hassle-free Payment Processing
Of course, you can avoid a similar “imbroglio” by enlisting with AVPS, keeping your tech updated and secure, and all fees reasonable — meaning you won’t really need to discriminate between classes of customers to begin with!
We’ll see you on all the subsequent Mondays in October — and beyond!