Supreme court rules about Merchant Free speech

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Supreme Court Rules about Merchant Free Speech
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Supreme Court Rules in favor of Merchant Free
Speech
Merchants may soon have the right to tell
customers that they will pay a surcharge if they
use a credit card rather than pay with cash In
New York and nine other states, merchants are
barred from charging credit-card purchasers a
surcharge, but are allowed to offer discounts for
paying in cash. The U.S. Supreme Court Rules on
January 8th, 2017 looked at the fascinating
question of whether this requirement violates the
merchants freedom of speech.
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• Step 2

The U.S. Supreme Court in January 2017 that threw
out a ruling that upheld a New York law barring
retailers from charging more to customers buying
with credit cards, sending the case back to a
lower court to decide on free speech grounds, not
as price regulation. In a 8-0 decision, the
justices said these laws Regulate Speech and
may be challenged as violations of the 1st
Amendment. Style
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• Step 3

Chief Justice John G. Roberts Jr. said these laws
do not prevent merchants from offering a discount
for those who pay cash. Rather, they simply
forbid disclosing that a posted price includes a
surcharge of 2 to 3 for using a credit or debit
card. Merchants want to pass the fees along only
to their customers who choose to use credit
cards, he said. They also want to make clear
that they are not the bad guys that the Free
Credit Card Processing companies, not the
merchants, are responsible for the higher prices.
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• Step 4

But the ruling Wednesday was only a partial
victory for the five New York businesses,
including a hair salon and an ice cream parlor in
Brooklyn, that sued to challenge the ban on
advertising or disclosing surcharges for using
credit cards. The U.S. 2nd Circuit Court of
Appeals in New York had upheld the law on the
grounds it was a price regulation, not a speech
restriction.
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• Step 5

Roberts and the high court disagreed. What the
law does is regulate how sellers may communicate
their prices, he said. A merchant who wants to
charge 10 for cash and 10.30 for credit may not
convey that price any way he pleases. He is not
free to say 10, with a 3 credit card
surcharge.
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• Step 6

But the justices did not strike down the state
laws, instead sending the case back to the New
York court to decide whether this speech
regulation could be justified. Sometimes, laws
are used to regulate the words of commercial
transactions to prevent buyers from being fooled
or confused. Until recently, the major credit
card companies had imposed contract restrictions
that prevented merchants from disclosing
surcharges. But those provisions have challenged
and knocked down. That in turn led to new legal
challenges against the state laws which forbid
sellers from disclosing these surcharges.
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