Quick Summary:

  • Traditional credit card surcharging is restricted under New Mexico House Bill 545
  • Merchants cannot surcharge customers who choose credit cards over cash or check
  • Cash discount programs are legal if offered to all buyers with clear disclosure
  • State agencies may charge convenience fees for credit card payments
  • Federal 4% cap applies when surcharging is permissible

New Mexico takes a unique approach to credit card surcharging through House Bill 545, which restricts merchants from adding surcharges when customers choose credit cards instead of cash or check payments. However, the Land of Enchantment allows businesses to implement cash discount programs, effectively achieving similar results through different pricing structures. This approach emphasizes transparency and consumer choice while still permitting businesses to recover credit card processing costs through compliant methods.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Consult with an attorney before implementing pricing programs, as rules can change and vary by business type.

Is Credit Card Surcharging Legal in New Mexico?

Traditional credit card surcharging has restrictions in New Mexico under House Bill 545. According to this legislation, merchants may not surcharge a cardholder who elects to use a credit card in lieu of payment by cash or check. This makes New Mexico one of the states with specific limitations on surcharge practices.

However, New Mexico law permits cash discount programs as an alternative. Businesses can legally offer discounts to customers who pay with cash or check, provided these discounts are offered to all prospective buyers and clearly disclosed. This creates a practical workaround that achieves similar economic results while complying with state law.

New Mexico state agencies operate under different rules, with statutory authority under Section 6-10-1.2 to charge uniform convenience fees that cover the approximate costs imposed by financial institutions for processing credit card transactions.

What's Allowed

New Mexico businesses can legally implement:

  • Cash discount programs - offer reduced prices for cash or check payments
  • Dual pricing systems - display separate prices for different payment methods
  • Convenience fees (for government entities) - state agencies can charge processing costs
  • Transparent pricing structures - clearly disclose all pricing and discount policies
  • Alternative payment incentives - promote non-credit card payment methods

What's Not Allowed

New Mexico businesses cannot:

  • Surcharge credit card users - when customers choose credit over cash/check
  • Hide pricing structures - all discounts and fees must be clearly disclosed
  • Surcharge debit cards - prohibited under federal Durbin Amendment
  • Exceed federal caps - 4% maximum when surcharging is permissible
  • Use deceptive pricing - pricing must be transparent and consistent

Penalty For Non-Compliance

While New Mexico doesn't specify unique penalties for surcharge violations, businesses face:

  • Consumer protection enforcement - New Mexico Attorney General's Consumer Protection Division
  • Federal trade practice violations - FTC action for deceptive business practices
  • Card network penalties - Visa and other networks impose fines for non-compliance
  • Consumer complaints - reports to New Mexico Department of Justice

New Mexico consumers who believe they've encountered improper surcharging can file complaints with the New Mexico Department of Justice Consumer Protection Division or through their Electronic Complaint Submission system.

Surcharging vs. Cash Discounts in New Mexico

New Mexico's legal framework creates a clear distinction between prohibited surcharges and permitted cash discounts. Understanding this difference is crucial for businesses wanting to recover credit card processing costs while remaining compliant.

Prohibited surcharging involves listing a base price and then adding fees for credit card payments. Under House Bill 545, businesses cannot impose additional charges on customers who choose credit cards over cash or check payments.

Permitted cash discounts involve offering reduced prices to customers who pay with cash or check. This approach is legal in New Mexico as long as:

  • Discounts are offered to all prospective buyers
  • Discount policies are clearly disclosed
  • The discount structure is transparent and consistent

Dual pricing allows businesses to display both the credit card price and the cash/check price simultaneously, giving customers clear information about their payment options and potential savings.

Types of Businesses That Must Follow New Mexico's Surcharge Laws

New Mexico's surcharge restrictions under House Bill 545 apply broadly to businesses throughout the state. However, the law's focus on credit cards "in lieu of payment by cash or check" suggests it primarily targets retail and service businesses that have multiple payment options.

Covered businesses typically include:

  • Retail stores and merchants
  • Service providers (repair, professional services)
  • Restaurants and hospitality businesses
  • Online retailers serving New Mexico customers
  • Small businesses accepting multiple payment methods

Special considerations:

  • Government entities can charge convenience fees under separate statutory authority
  • Businesses accepting only credit cards may have different considerations since customers cannot choose cash/check alternatives
  • Industry-specific regulations may apply additional requirements for certain business types

The law's emphasis on choice between payment methods means businesses should carefully consider their payment options and pricing structures to ensure compliance.

New Mexico Credit Card Surcharge FAQs

How do cash discount programs work legally in New Mexico?

Businesses can offer discounts to customers paying with cash or check, as long as these discounts are available to all buyers and clearly disclosed. For example, a business might advertise a service for $100 but offer it for $97 to cash-paying customers. This achieves similar economic results to surcharging without violating House Bill 545.

Can New Mexico gas stations charge different prices for cash versus credit?

Yes, gas stations commonly display dual pricing with separate cash and credit prices. This is considered a cash discount program rather than a surcharge, making it compliant with New Mexico law. Both prices must be clearly displayed with equal prominence.

What's the difference between New Mexico's approach and states that allow surcharging?

New Mexico restricts adding fees to credit card payments but allows reducing prices for cash payments. States like Texas or Arizona might allow a 3% surcharge on credit cards, while New Mexico would require offering the same economic benefit as a 3% cash discount instead.

Do New Mexico's restrictions apply to online businesses based in other states?

New Mexico-based businesses must follow state law regardless of where they operate online. Out-of-state businesses serving New Mexico customers should consult with legal counsel, as the application of New Mexico law to interstate commerce can be complex.

Can New Mexico service businesses offer payment method discounts?

Yes, service businesses can legally offer discounts for customers who pay with cash, check, or other non-credit methods. For example, a contractor might offer a 2% discount for cash payments on a home improvement project, as long as this discount is clearly disclosed and available to all customers.

For more information about consumer protection in New Mexico, contact:

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