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legal landscape regarding surcharging credit card transactions in both New York (NY) and New Jersey (NJ) for your remote web development consultancy. Here's a breakdown:

New York:

  • Surcharging is Legal but Strictly Regulated: As of February 11, 2024, New York law permits businesses to surcharge credit card transactions. However, there are strict consumer disclosure requirements.
  • Transparency is Key: You must clearly and conspicuously post the total price, including the surcharge, before the transaction is completed. This means the client needs to be aware of the surcharge amount before they agree to pay.
  • Surcharge Limit: The surcharge cannot exceed the amount that the credit card company charges you for processing the transaction. Additionally, federal law restricts surcharges from being higher than 4% of the transaction.
  • How to Display Prices: You can comply by:
    • Listing both the total credit card price and a lower cash price.
    • Listing the total credit card price and indicating a discount for cash payments.
    • Charging the same price regardless of payment method.
  • Prohibited Practices: Simply posting a sign saying "credit card surcharge applies" or a percentage without showing the total price is insufficient. You cannot charge a final price (including the surcharge) that is greater than the posted price.
  • Debit Card Surcharging is Illegal: In New York, and all other US states, you cannot surcharge debit card transactions.
  • Penalties for Non-Compliance: Violations of the New York surcharge law can result in civil penalties of up to $500 per violation.

New Jersey:

  • Surcharging is Legal with Conditions: New Jersey also permits credit card surcharging, provided the surcharge does not exceed your cost of accepting the card. Federal law's 4% cap also applies here.
  • Strict Disclosure Requirements: Similar to New York, New Jersey has strict rules about informing consumers before they incur any charges.
  • Disclosure Methods: For in-person transactions, you must post surcharge information at the entrance and the point of sale. For online transactions, the surcharge must be clearly displayed on the checkout page. For phone transactions, you must provide verbal notice before processing payment. Restaurants have additional requirements to display surcharges on menus.
  • "Prior to Incurring Charges": This is a key aspect in New Jersey. You can't surprise clients with a surcharge after services have been rendered without prior notification.
  • Debit Card Surcharging is Illegal: As in New York, surcharging debit cards is not allowed.

For Remote Web Developers:

  • Online Transactions: If you are a remote web developer in NY or NJ collecting fees online for virtual meetings, you'll need to ensure your invoicing or payment gateway clearly displays any surcharge before the client submits payment. This could be a separate line item labeled "Credit Card Processing Fee" or by presenting the total amount inclusive of the fee.
  • In-Person Meetings (if applicable): If you occasionally meet clients in person in NY or NJ and use a Square Reader, you would need to adhere to the in-person disclosure rules of that specific state at the time of the meeting.
  • Square's Terms: While Square itself facilitates the transaction, it's your responsibility as the merchant to comply with the surcharge laws of your operating location (and where the transaction takes place, if different). Square's terms of service will likely require you to operate legally.

Recommendations:

  • Be Transparent: Regardless of the state, clear and upfront communication with your clients about any additional fees is crucial for maintaining good relationships.
  • Factor into Pricing: As discussed previously, consider incorporating the processing fees into your overall service price to avoid directly adding a surcharge, which can sometimes be perceived negatively by clients. Ensure your listed price is the total they will pay with a credit card in this scenario.
  • Compliance: If you decide to surcharge, ensure your invoicing system or payment process is fully compliant with the specific laws of both New York and New Jersey, as they have detailed requirements. It might be wise to consult with a legal professional to ensure full compliance, especially since laws can change.
  • Consider Offering Alternatives: Providing options for payment methods that don't incur fees for you (like bank transfers) might be a good way to avoid surcharges altogether or offer a discount for those methods.

By understanding and adhering to these regulations, you can legally and ethically manage credit card processing fees when using Square Reader for your freelance ecommerce consulting business in New York and New Jersey.

in-person disclosure rules for credit card surcharges in New Jersey at the time of meeting​

New Jersey In-Person Disclosure Rules for Credit Card Surcharges:

As of April 18, 2025, if you, as a seller (other than a restaurant), impose a surcharge on a customer for using a credit card for an in-person transaction in New Jersey, you must disclose the amount of the surcharge to the customer prior to the customer incurring any charge for the goods or services. This disclosure must be made by:

  • Posting clear and conspicuous notice on a sign at the point of entry of your business or the location where the meeting is taking place. This ensures the client is aware of the surcharge policy before engaging in the service.
  • Posting clear and conspicuous notice on a sign at the point of sale (e.g., where you will be accepting payment with the Square Reader). This reinforces the disclosure right before the transaction occurs.

Key Aspects of the Disclosure:

  • Amount of Surcharge: The notice must clearly state the amount of the surcharge. While stating a percentage is permissible, the best practice is to indicate the actual dollar amount or clearly explain how it will be calculated based on the transaction total.
  • "Prior to Incurring Charges": This is a critical element. You cannot simply add the surcharge at the moment of payment without the client being informed beforehand through the posted signage.
  • Clarity and Conspicuousness: The signs must be easily visible and understandable to your clients. Handwritten notes, homemade signs, and stickers are acceptable as long as they are clear and prominently displayed in the required locations.
  • Restaurants Have Additional Rules: If your consulting sometimes involves meetings at restaurants where payment might occur, note that restaurants have stricter rules, requiring surcharge disclosures in customer service areas and on menus (including physical, online, and digital).

In practical terms for your freelance ecommerce consulting meetings in New Jersey:

  • If you meet clients at a co-working space or your office, you would need a sign at the entrance to the space (if permissible and applicable) and another sign clearly visible where you will process the payment with your Square Reader.
  • If you meet clients at their business location, you would need to ensure you verbally inform them of the surcharge before processing the payment and ideally have a small, professional sign you can display during the payment process.
  • Simply mentioning it verbally at the moment of payment might not fully satisfy the "prior to incurring charges" requirement if there was no prior signage.

Important Considerations:

  • Surcharge Limit: Remember that any surcharge you impose cannot exceed your actual cost of processing the credit card transaction and is federally capped at 4%.
  • Debit Cards: You cannot surcharge debit card transactions in New Jersey (or any other US state).
  • Transparency: Even with proper signage, it's always good practice to verbally reiterate the surcharge to your client before processing the payment to ensure full transparency and avoid any surprises.

By adhering to these in-person disclosure rules in New Jersey, you can legally and ethically pass on the Square Reader's transaction fees to your clients during your meetings.