New Jersey Cracks Down On Cashless Merchants, Hidden Fees

By Christian Wade | The Center Square contributor, The Center Square New Jersey

February 10, 2023

(The Center Square) — New Jersey is cracking down on private merchants who refuse to accept cash as a form of payment and tack on hidden surcharges to credit card payments.

Attorney General Matthew J. Platkin said his office cited several business owners this month for either charging consumers fees for using credit cards, debit cards or prepaid cards without disclosing them, or refusing to accept cash offered as payment.

Platkin said the Division of Consumer Affairs’ Office of Consumer Protection has investigated dozens of complaints about businesses that wouldn't let their patrons pay in cash or hit them with hidden surcharges.

He said that violates the New Jersey Consumer Fraud Act, which requires merchants give consumers the option to pay cash and also disclose total selling price — including any surcharges for using credit or debit cards.

"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," Platkin said.

Platkin said low-income communities, minorities and older adults are still more likely to rely on cash and not have a credit or bank card, which raises equity issues when businesses decline to accept paper money.

One of the businesses cited for violations was Skyviews of America, LLC, which operates the Dream Wheel at the American Dream Mall in East Rutherford for allegedly requiring customers who wanted to pay cash buy a gift card from another merchant that included a surcharge. "The company was hit with a $1000 fine," according to Platkin's office.

Two other businesses -- Ronnie’s Hot Bagels in Hillsdale, and Seymour’s Café in Clifton -- are alleged to have violated the state's fraud act by failing to disclose credit card surcharges before customers ordered. "They were each fined $500 for the alleged violations," the AG's office said.

New Jersey's actions highlight ongoing efforts to crackdown on cashless stores and restaurants that proliferated during the COVID-19 pandemic, when contactless payments were viewed as helping to protect public health.

In recent years, cities such as New York City and states have passed, or are considering bills that prohibit retailers from refusing to accept cash, a policy they say shuts out the millions of Americans who don't have a bank account or credit cards. New Jersey was one of the first states to do so by updating its fraud prevention law to require a cash payment option.

Critics have argued that restricting no-cash businesses stifles innovation, and some groups have called on Congress to improve access to banking institutions for marginalized consumers.

A proposal filed in the previous session of Congress by Sen. Bob Menendez, D-N.J., would have required retail businesses to accept cash as a form of payment for sales of less than $2,000, and prohibit them from charging cash-paying customers higher prices. But the proposal didn't gain much traction.

Under current federal law, there is no requirement for private businesses to accept cash or coins as a form of payment.

The focus of the work of The Center Square New Jersey is state and local-level government and economic reporting that approaches stories with a taxpayer sensibility.