New York credit card surcharge rules for restaurants: post the total

A restaurant in New York that wants to recover card fees has a narrower path than a restaurant in most states. The General Business Law lets a seller add a credit card surcharge, but it caps the surcharge at what the card company actually charges the business and it requires the seller to post the all-in price. It also protects a different system, two-tier pricing, which many owners use to show a cash price and a card price. This guide, checked in November 2026, reads General Business Law section 518. It is general information, not legal advice. Your processing agreement and card network rules apply too, and a lawyer can review your signs.

What does section 518 allow?

The statute lets a seller add a surcharge to a credit card transaction, but the surcharge may not exceed the amount of the surcharge charged to the business by the credit card company. The seller may not charge more than the amount posted for the transaction. The cap is tied to your actual cost, so a flat 3 percent charge that is higher than your effective rate on that card goes beyond what the statute allows. Check your statement for the cost of each card type before you choose a number.

What must you post?

A seller who surcharges must clearly and conspicuously post the total price for using a credit card in the transaction, inclusive of the surcharge. The point is that the guest sees the all-in price. A menu that lists $20 and adds a percentage at the register does not do that. A menu that lists $20 cash and $20.60 card does. Post the card price where guests choose, on the menu, on the sign and on the online ordering page.

What is two-tier pricing?

The statute says nothing in the subdivision prohibits merchants from offering a two-tier pricing system. That means posting the credit card price, including any surcharge, next to the cash price. Many owners prefer this because the guest sees two prices up front. Keep the arithmetic simple and consistent, and apply the same two prices to every item.

Does it apply to debit cards?

The page read for this guide speaks of credit cards. It does not say how the section applies to debit cards, so ask your processor and a lawyer before you charge anything on a debit transaction. Test how your terminal tells debit from credit, since a setting that surcharges every card could reach a payment you did not intend.

How do you work out the right number?

Look at your last three months of processing statements and find the effective rate for credit cards, which is total fees divided by total volume. Compare that with the rate you plan to charge. If the rate you set is higher than what the card company charges you, you are over the cap. Revisit the number when your processor changes your rates. A conservative owner sets the surcharge below the effective rate, with room to spare.

What is the penalty?

A seller that violates the section is liable for a civil penalty not to exceed $500 for each violation. The statute also lets municipal consumer affairs offices, town attorneys, city corporation counsel and other designees enforce the section, and the money they collect stays with the local government. A restaurant in New York City could therefore hear from the city, not only from the state.

How do you train staff?

Give servers a one-line answer for a guest who asks about the price difference, such as that the card price covers the cost of processing, and tell them to point to the posted sign. Tell cashiers not to waive the surcharge for some guests and not others, because that makes the posted price inaccurate. Review your signs once a quarter.

What about online ordering and third parties?

The posting rule does not stop at the door. If guests order through your website, show the card price before they confirm, and if a third-party ordering page uses your merchant account, check that its pricing matches your posted prices. A page that shows one price and charges another is the kind of mismatch that draws complaints. Review each channel when you change a price, and keep dated screenshots of the pages as they looked, in case anyone asks later what was posted.

What should you do next?

Pull your processing statement, work out your effective credit card rate and decide whether to surcharge, use two-tier prices or raise menu prices a little. If you choose either of the first two, write the sign, put it up and test your terminal and online ordering page. Then read how New York City treats cash payments, since a two-tier system and cash acceptance meet at the register.

More guides for your business:

• NYC cash acceptance law for restaurants: the cashless ban
• Card surcharge rules: Massachusetts, Oregon, New York, New Hampshire and Arizona
• Restaurant card surcharge vs cash discount: how to choose

More in the US guides for food businesses.