WASHINGTON — Ten states and Puerto Rico block merchants from charging customers extra for paying with plastic instead of cash. Laws prohibiting credit card swipe fees face a challenge at the U.S. Supreme Court on Tuesday.
The justices will hear oral arguments in a case where a hair salon is challenging New York's law.
Expressions Hair Design says in New York businesses must raise prices and charge a discount for cash to cover the cost of transaction fees imposed by credit card companies.
The salon is hoping to use the First Amendment as a vehicle for bringing back swipe fees.
The group Consumer Action is siding with the salon, saying the laws trample freedom of speech by forbidding businesses from charging credit card fees.
"Merchants should be able to say there is an additional cost and I'm going to be passing it on to you," said Ruth Susswein, Consumer Action's deputy director of national priorities.
New York says the Supreme Court never should have taken the case because it involves business conduct, not speech.
States like New York prohibited swipe fees as a way to encourage credit card use.
Allowing the surcharges would negatively impact sales, the states argued in a brief at the court.
A ruling could narrowly affect New York or could impact credit card fees in all states where they are banned.
Pennsylvania is not one of the states that has a law prohibiting credit card fees. The states involved are California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Maine, New York, Oklahoma, Texas, and Puerto Rico.
Cox Media Group
/cloudfront-us-east-1.images.arcpublishing.com/cmg/XCUXZC2XYZHCRGNNGKFEX6U3LQ.png)
