Retailers’ Free Speech Challenge to Surcharge/discount Distinction for Describing Price Differences for Credit Card and Cash Sales
Retailers’ Free Speech Challenge to Surcharge/discount Distinction for Describing Price Differences for Credit Card and Cash Sales (US Supreme Court docket certarari granted on 10-20-16, and US Supreme Court heard argument of case on 1/11/17 :U.S. Supreme Court on 1/11/17 struggled over how to decide a challenge to a state law barring retailers from charging more to buy with credit instead of cash, debating whether it merely regulates prices or violates merchants’ constitutional rights. The eight justices heard an hour of arguments in an appeal brought by merchants to a lower court’s ruling upholding the New York law, which is similar to statutes in nine other states. Merchants contend these laws infringe on their free speech rights guaranteed by the U.S. Constitution by dictating how they describe their pricing to customers. Retailers are forced to pay fees to credit card companies every time a customer buys with a card. The law bars retailers from imposing a surcharge on customers who make purchases with a credit card. It also makes it impossible for merchants to call fees paid to credit card companies a surcharge that is added to the price of a product. The law does not stop retailers from offering a discount for cash purchases. The justices debated whether the law even regulates speech or whether it is a traditional form of price regulation that is not subject to a free speech challenge. Several justices including Stephen Breyer indicated they did not think the law affects free speech, suggesting they may vote to uphold it. Breyer said the law simply requires retailers to post a price that includes the credit card surcharge. [as reported in Credit & Collection News e-newsletter of 1/12/17]