Home Events + News NJ Businesses Are Being Fined For Undisclosed Credit Card Fees: What to Know

NJ Businesses Are Being Fined For Undisclosed Credit Card Fees: What to Know

by Elena Gergis
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With digital spending reaching an all-time high and contactless POS payments increasing in popularity, many businesses are leaning toward becoming cash-free. But the transition isn’t that simple, several New Jersey businesses have discovered. In an effort to protect consumers, the New Jersey Division of Consumer Affairs is cracking down on New Jersey businesses that are cash-free or fail to clearly disclose credit card fees. Read on to learn more about the fees + surcharges at New Jersey restaurants and the local businesses that have been issued notices of violation.

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A Consumer Affair

Most businesses in New Jersey are prohibited from being cashless operations, per a law signed in 2019. Supporters say that laws like this make it easier for all consumers to access commerce, regardless of their creditworthiness. Critics say it’s a burden on businesses.

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The New Jersey Division of Consumer Affairs (DCA) protects the public from fraud, deceit, misrepresentation, and professional misconduct in the sale of goods and services in New Jersey. In recent months, the DCA investigated numerous complaints from New Jersey residents regarding businesses that either charged consumers fees for using credit cards, debit cards, or pre-paid cards without clearly disclosing such fees or that did not accept cash offered by consumers as payment.

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“New Jersey consumers deserve to know exactly how much they will be paying when they go to a store and be able to pay however they can,” said Attorney General Matthew J. Platkin via a press release.

The New Jersey Consumer Fraud Act (CFA) states: “a person selling or offering for-sale goods or services at retail shall not require a buyer to pay using credit or prohibit cash as payment in order to purchase the goods or services.” N.J.S.A. 56:8-2.33(a).

The debate over going cashless has intensified in recent years. Popular salad chain Sweetgreen went cashless for two years and then changed course. Many cities now ban cashless businesses, including New York City, Washington D.C., and Philadelphia, PA.

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Changes

The DCA undertook a year-long effort in 2023 to enforce these provisions. Starting in January 2023, notices of violations and civil penalties have been issued against 30 businesses throughout the state, including bars, restaurants, coffee shops, delicatessens, hair salons, and a clothing store for either not accepting cash or for charging a credit card surcharge without properly notifying consumers.

In 2023, two notices of violations for not accepting cash were issued to Hidden Grounds Coffee (in Hoboken and New Brunswick) which settled with the Division to resolve its alleged CFA violation. The business agreed to pay a civil penalty of $2,000 and accept cash as a method of payment at its retail locations within the state.

The following businesses were also cited for “no-cash” policies requiring consumers to use another form of payment in Hoboken and Jersey City:

The following businesses were cited for failing to clearly and conspicuously provide notice to customers regarding surcharges in Hoboken and Jersey City:

The civil penalties assessed against each business ranged from $500 to $4,000, depending on the nature and number of violations found.

The DCA published a comprehensive guidance document on December 19th, 2023 to help merchants and consumers understand their obligations under the law. The document, titled “Credit Card Surcharges: Frequently Asked Questions,” provides a detailed explanation of P.L. 2023, c. 146, which prohibits merchants from charging credit card surcharges that exceed their actual cost to process credit card payments.

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The DCA urges consumers to check receipts to make sure the price charged matches the advertised price of an item. Also, look out for card surcharges that exceed the actual cost of the processing fee, which is typically around 1% to 5%.

Consumers who believe that a business violates the New Jersey Consumer Fraud Act, are encouraged to file an online complaint. Consumers can also call 1-800-242-5846 to receive a complaint form by mail.

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