US Supreme Court to weigh credit card swipe fees

SAN FRANCISCO - FEBRUARY 25: Visa credit cards are arranged on a desk February 25, 2008 in San Francisco, California. (Photo Illustration by Justin Sullivan/Getty Images)V

caption arrowCaption
SAN FRANCISCO - FEBRUARY 25: Visa credit cards are arranged on a desk February 25, 2008 in San Francisco, California. (Photo Illustration by Justin Sullivan/Getty Images)V

Ten states have blocked merchants from charging customers extra for paying with plastic instead of cash.

Explore>> Read more trending stories

Laws prohibiting credit card swipe fees will face a challenge at the U.S. Supreme Court on Tuesday.

The justices will hear oral arguments in a case where a hair salon is challenging New York's law.

Expressions Hair Design said in New York businesses must raise prices and charge a discount for cash to cover the cost of transaction fees imposed by credit card companies.

The salon is hoping to use the First Amendment as a vehicle for bringing back swipe fees.

The group Consumer Action is siding with the salon, saying the laws trample freedom of speech by forbidding businesses from charging credit card fees.

"Merchants should be able to say there is an additional cost and I'm going to be passing it on to you," said Ruth Susswein, Consumer Action's deputy director of national priorities.

New York said the Supreme Court never should have taken the case because it involves business conduct, not speech.

States like New York prohibited swipe fees as a way to encourage credit card use.

Allowing the surcharges would negatively impact sales, the states argued in a brief at the court.

A ruling could narrowly affect New York or could impact credit card fees in all states where they are banned.

About the Author