Anti-surcharge laws are anti-competitive retailers allege.
The Retail Litigation Center (RLC), the Retail Council of New York State, Florida Retail Federation and the Food Marketing Institute filed an amicus brief with the U.S. Supreme Court in Expressions Hair Designs vs. Schneiderman. The case takes up the issue of whether state no-surcharge laws unconstitutionally restrict retailers from encouraging customers to use cash or credit cards with lower processing fees.
“Due to lack of competition among card brands, the costs associated with credit card acceptance have skyrocketed so that consumers and retailers now pay billions of dollars in fees to the card companies,” said RLC president Deborah White. “The Supreme Court should recognize that the First Amendment allows retailers to truthfully inform their customers about these costs and let customers decide what is best for their convenience and budget.”
Credit card “swipe fees” add an average of around three percentage points on each sale. For many merchants, swipe fees are among their highest costs of doing business. Without any competition among credit card brands, the brief argues that laws that restrict merchants from communicating the cost of acceptance to customers, which “impermissibly impinge” on merchants’ right to speak.
According to the brief:
Simply put, state anti-surcharge laws are not consumer-protection legislation. They are, instead, anticompetitive, anti-consumer provisions that simply tend to increase card-company profits at the expense of merchants and their customers downstream. Indeed, laws that prohibit steering consumers away from expensive payment methods are special-interest legislation at its very worst—a giveaway to the card companies that protects an already highly concentrated and highly profitable industry from even the most basic levels of healthy competition.
