April 20, 2023

Can you pass on credit card fees during a Remote Online Notarization?

A notary asked if they could pass the credit card processing fee on to the signer for a RON. 

The answer is “no,” and here is why:

Law regarding credit card processing fees:

General Business law § 518. Credit card surcharge prohibited. No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means. Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.

“Seller” means any person who honors credit cards or debit cards which may be used to purchase or lease property or services. See General Business law § 511.

Courts have interpreted General Business law § 518 to hold that:
A surcharge is a charge in excess of the usual or normal amount, and a surcharge is imposed when a credit card user is charged more than that amount; and New York General Business law § 518 prohibits the posting of a cash price and an additional credit card surcharge, expressed either as a % or a specific $ amount. See Expressions Hair Design v. Schneiderman, 581 U.S. 37, 44-49 (2017)

New York General Business law § 518 permits differential pricing (a cash discount price and a total price) but requires that a higher price charged to credit card users be posted in total dollars-and-cents form;
A surcharge means any means of increasing the regular price to a cardholder which is not imposed upon customers paying by cash, check, or similar means; and The purpose of section 518 is to ensure that consumers will be seeing at least the highest possible price they will have to pay when they see a tagged or posted price, and to prevent seeing a higher price at the register if a credit card is used.

See Expressions Hair Design v. Schneiderman, 32 N.Y.3d, 382, 392 (2018).