Is it legal to charge credit card fees in California on Reddit?

Navigating Credit Card Fees in California: Legal Considerations and Compliance

California has recently enacted a new law, known as the “junk fee” law, which aims to curb deceptive and excessive fees imposed on consumers. This law has implications for businesses that accept credit card payments.

Legal Restrictions on Credit Card Surcharges

Under the new law, businesses are prohibited from directly surcharging customers for using credit cards. This means that businesses cannot add an additional fee to the price of goods or services when a customer pays with a credit card.

Alternative Option: Cash Discounts

However, businesses are still permitted to offer a discount for cash payments. This means that businesses can charge a higher price for goods or services paid for with a credit card and offer a lower price for customers who pay with cash.

Compliance with the New Law

Businesses must carefully review their current practices to ensure compliance with the new law. Failure to comply could result in penalties, including fines.

Best Practices for Businesses

To avoid any potential legal issues, businesses should consider the following best practices:

• Clearly disclose any cash discounts: Inform customers of any discounts available for cash payments.
• Avoid using misleading language: Do not use terms such as “credit card surcharge” or “convenience fee” to describe the difference in price between cash and credit card payments.
• Provide reasonable notice: Give customers ample notice of any price difference based on payment method.
• Document compliance: Keep records of any cash discounts offered to demonstrate compliance with the law.

Conclusion

California’s new junk fee law has introduced restrictions on credit card surcharges. While businesses cannot directly charge customers for using credit cards, they are still permitted to offer cash discounts. Businesses must carefully review their compliance to avoid penalties and ensure transparency in their pricing practices. By following the best practices outlined above, businesses can navigate the legal landscape and maintain compliance with the new law.