The Senate passed a bill on June 18, sponsored by Senate Majority Leader M. Teresa Ruiz and Senator James Beach, to amend current law and prohibit businesses from imposing a surcharge on debit and gift card transactions.
Current federal law caps interchange fees for debit card transactions, and some major card issuers, such as Visa and Mastercard, prohibit merchants from charging debit-card surcharges.
Despite these regulations, reports suggest that some merchants have continued to apply fees to these transactions due to confusion about the law and improper software that applies universal charges to all card payments.
“Families continue to face rising costs, and fees on everyday transactions only add to the strain on household budgets, especially for those who rely on debit cards as their primary form of payment,” said Majority Leader Ruiz (D-Essex/Hudson).
“New Jersey residents should not be penalized for choosing a more convenient way to pay, especially when they are using their own money rather than borrowing on credit. Prohibiting businesses from charging debit or gift card transaction fees and strengthening enforcement will help protect consumers, promote fairness, and put more money back into families’ pockets when they go out and support the community.”
New Jersey state law already prohibits sellers from imposing a credit card surcharge that exceeds the seller’s actual cost of processing the credit card payment. The bill, S-4107, would amend state law to prohibit sellers from imposing surcharges on debit card and gift card transactions and to implement enforcement standards.
A violation would constitute an unlawful practice under the New Jersey Consumer Fraud Act and would be punishable by a fine. The attorney general could issue cease-and-desist orders, sellers could be assessed for punitive damages, and affected parties could be awarded treble damages and costs.
The Senate action on debit and gift-card transaction fees comes as Gov. Mikie Sherrill and Attorney General Jennifer Davenport announced actions on June 15 aimed at reducing and eliminating so-called junk fees in New Jersey to advance their shared goal of making New Jersey more affordable for working families and cost-burdened residents.
They claim that Americans pay billions of dollars a year in junk fees – hidden, unnecessary, or unexpected add-on charges that drive up the advertised price of goods and services, often with little or no value to consumers.
One of the major aspects of the Sherrill campaign for governor last year was making life more affordable for New Jersey residents. Sherrill’s affordability platform focused on reducing cost‑of‑living pressures by expanding housing supply, lowering energy costs, consumer protections in health care, targeting tax relief, and streamlining government processes.
In Executive Order 19 signed on June 15, Sherrill directed all state agencies to review the industries they regulate to identify and analyze the impact of junk fees on consumers, and to report recommendations for legislative and regulatory measures to trim or eliminate them.