Today, the Retail Industry Leaders Association (RILA) applauded a unanimous decision authored by the Chief Justice of the U.S. Supreme Court that expressly acknowledges that merchant communication about prices to consumers is constitutionally protected speech, not mere economic activity. The decision vacates a lower court ruling that a New York state law that prohibited merchants from disclosing the true cost of credit cards to consumers was routine price regulation. The ruling is an important step toward allowing retailers to tell consumers about the added costs of credit card payments. RILA, joined by other associations, filed an amicus brief earlier this year urging the Court to recognize the importance of transparent merchant communication to consumers about credit cards costs.
"This unanimous ruling by Chief Justice Roberts is an important acknowledgement of the true value that transparent price communication provides," said Deborah White, RILA senior executive vice president and general counsel. "The Court's ruling affirms the right of retailers to communicate honestly with their customers about the true cost of credit cards. In so doing, the Court also recognized that it is the credit card companies, not the merchants, that are responsible for the higher prices in this context."
KEY QUOTES FROM RULING:
"Each time one of their customers pays with a credit card, these merchants must pay some transaction fee to the company that issued the credit card. The fee is generally two to three percent of the purchase price. Those fees add up, and the merchants allege that they pay tens of thousands of dollars every year to credit card companies. Rather than increase prices across the board to absorb those costs, the merchants want to pass the fees along only to their customers who choose to use credit cards. They also want to make clear that they are not the bad guys—that the credit card companies, not the merchants, are responsible for the higher prices."
"In regulating the communication of prices rather than the prices themselves, Section 518 [the New York law] regulates speech."
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.