Credit card and cash | Photo by Vyacheslav Argenberg/http://www.vascoplanet.com via Wikimedia Commons
NEWARK, NJ – In response to numerous complaints it received, the New Jersey Consumer Affairs Office of Consumer Protection (OCP) investigated the practices of several establishments in recent months. Four businesses have been issued Notices of Violation of the New Jersey Consumer Fraud Act (CFA) for either not accepting cash or charging a credit card surcharge without properly notifying consumers.
According to the OCP, businesses are allowed to charge card surcharges. Still, the CFA requires establishments to disclose that they are passing the fee amount to consumers (which can be stated as a percentage) before the customer is charged.
In addition, the CFA prohibits the sale of “any merchandise at retail unless a stamp plainly marks the total selling price of such merchandise, tag, label or sign either affixed to the merchandise or located at the point where the merchandise is offered for sale.”
“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. “Many consumers from underrepresented communities do not have access to bank accounts or credit cards. Laws requiring businesses to accept cash protect those consumers and ensure social equity in stores throughout the State.”
Division of Consumer Affairs Acting Director Cari Fais said the law protects consumers’ right to pay for goods and services with cash. “The enforcement actions the Division has recently taken will make sure store owners do not forget their responsibilities to consumers under the law.
A Notice of Violation (NOV) for not accepting cash as payment was issued to Skyviews of America, LLC, which operates the Dream Wheel at the American Dream Mall in East Rutherford, NJ. The NOVs included a $1,000 civil penalty. It required customers wishing to pay cash to ride the Dream Wheel to purchase gift cards from another merchant, which included a surcharge, to use cash.
Two NOVs for not accepting cash were also issued to Hidden Grounds Coffee which settled with the Division to resolve its alleged CFA violation. The business agreed to pay a civil penalty of $2,000 and, among other things, to accept cash as a payment method and minimize any inconvenience for cash-paying customers. Hidden Grounds Coffee also agreed to distribute a summary of the Consent Order to management responsible for oversight and training employees at its retail locations within the State.
Ronnie’s Hot Bagels in Hillsdale and Seymour’s Cafe in Clifton were issued NOVs. Both businesses were alleged to violate the CFA by failing to disclose card surcharges before consumers ordered; instead, the businesses disclosed the charge on a receipt after accepting payment. Each NOV includes a $500 civil penalty.
Each instance of failing to notify a consumer of a card surcharge or charging more for merchandise than the displayed price may constitute a separate violation of New Jersey’s Consumer Fraud Act. Violators are subject to a maximum penalty of $10,000 for the first violation and $20,000 for each subsequent violation under NJSA 56:8-13. Not accepting cash as payment is subject to a maximum penalty of $2,500 for the first violation.
How Consumers Can Protect Their Pockets:
- Check the receipt to ensure the price matches the advertised or posted price (plus tax, if applicable).
- Look for the merchant to display the total price (excluding tax) using each accepted payment method. For example, the merchant should display the total price if the customer pays in cash and the amount charged if a card surcharge applies, which can be stated as a percentage.
- Be wary of card surcharges exceeding the actual incremental cost of the processing fee, typically around 1-5%.
Consumers who believe businesses violate the New Jersey Consumer Fraud Act are encouraged to file online complaints. Consumers can also call 1-800-242-5846 to receive a complaint form by mail.
–With Jay Domingo/PDM
