New Jersey's surcharge law: capped at your actual cost, with notice first
P.L.2023, c.146 was approved on Aug 18, 2023 and took effect immediately [1]. It is codified at N.J.S.A. 56:8-156.1 and following, inside the Consumer Fraud Act. Here is what it says, in plain words.
| Rule | What the law says |
|---|---|
| The cap | A surcharge on a credit card sale in New Jersey may not be greater than the seller's actual cost to process that payment. |
| Stores and other sellers | Post a clear sign at the point of entry and the point of sale, before the customer incurs any charge. |
| Restaurants | Post a sign in the customer service area and put the surcharge on the menu. |
| Websites, apps and kiosks | Show clear electronic notice on the checkout page before processing the payment. |
| Phone orders | Tell the customer out loud before processing the payment. |
| Records | Make your books and records available to the Director of the Division of Consumer Affairs to check compliance. |
| Enforcement | A violation is an unlawful practice under the Consumer Fraud Act (P.L.1960, c.39). |
The law defines a credit card as a card or device used "to obtain credit" [1]. It says nothing that allows a surcharge on debit, and the card networks forbid it anyway (next section). See the surcharge laws by state for how New Jersey compares with its neighbors.
Card network rules sit on top of the state law
Visa's rules apply in every state, including New Jersey. Visa's merchant Q&A says a U.S. merchant that wants to surcharge must [2]:
- notify Visa and its acquirer (the processor's bank) at least 30 days before it starts;
- surcharge credit cards only, never debit or prepaid cards, even when a debit customer picks "credit" on the terminal;
- keep the surcharge at or below its merchant discount rate for that card;
- disclose the surcharge at the point of sale, in store and online, and show the dollar amount on every receipt.
What "actual cost" means on a $100 sale
On Square Free, an in-person credit card sale costs 2.6% + 15¢ [3]. On $100, that is $2.75, so a New Jersey surcharge on that sale should not be more than $2.75.
On interchange-plus pricing, the cost changes with each card. Your statement is your proof of cost, which is one reason the law's records rule matters [1].
Many NJ owners get card processing from their bank. Compare it anyway
Banks resell card processing under their own agreements. Clover, for example, says its contract terms and termination fees vary by the company that sold you the account, and names Citi, PNC and Wells Fargo among more than 3,000 financial institutions that sell Clover in the U.S. [4]. A Clover device from your bank may carry a different rate and term than the prices on clover.com.
- Ask your bank for its processing price in writing: pricing model, markup, every monthly fee.
- Ask for the term, the early termination fee and whether the equipment is leased, rented or owned.
- Compare it with published list prices. Our cheapest credit card processing page runs those through three sample businesses.
Who is shopping for merchant services in New Jersey
New Jersey had 237,968 business establishments with paid employees in 2023, according to the Census Bureau's County Business Patterns [5]. Most take cards. The largest groups that run on small, frequent card sales are below.
| Business type | Establishments |
|---|---|
| All industries | 237,968 |
| Retail trade | 29,729 |
| Restaurants and other eating places | 18,701 |
| Personal care services (salons, barbers, nails) | 7,550 |
County Business Patterns counts only places with paid employees, so owner-only shops and booth renters are not in these numbers. Industry pages for the three largest groups: restaurants, retail and salons.
What a New Jersey business should check before signing
- Your effective rate: total fees divided by card sales, from last month's statement.
- The pricing model: flat rate, interchange-plus or tiered, and the markup in writing.
- Monthly fees: software, statement, PCI and any minimum.
- Contract: term, renewal, early termination fee.
- Equipment: owned, rented, leased or on a subscription, and the buyout price.
- Surcharging, if offered: does the program keep the fee at or below your actual cost [1], skip debit cards [2], and print the notices New Jersey requires?
Searching for merchant services near you? A local office does not change your interchange or your legal duties. Price, terms and support do. BatchOut is our own processing service; if we show it next to other options, we label it as ours.