US retailers have sued the states of Texas, Florida and California over state laws banning the application of "swipe fee" surcharges for credit card payments.

Small businesses in all three states filed separate lawsuits against state authorities on 5 March, claiming the prohibition of surcharges on credit card payments is unconstitutional and breaks the First Amendment or right to free speech.

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Italian Colors Restaurant, lead plaintiff in the lawsuit against California’s Attorney General, said: "California law allows merchants to offer ‘discounts’ for using cash or a debit card, yet makes it illegal to impose ‘surcharges’ for using a credit card – even though the conduct in both cases (the use of dual pricing) is the same."

In December 2013, retailers won an antitrust settlement with Visa, MasterCard and American Express over swipe fees.

The $5.7bn settlement approved by a federal judge in New York allows merchants to impose surcharges under certain conditions.

The merchants in Texas, California and Florida argue that they cannot take advantage of the victories against the credit card giants because federal law still prevents them from applying surcharges.

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According to the plaintiffs, the laws were first introduced in the 1980s at the behest of credit card companies.

The Californian plaintiffs said: "As they did in the 1980s, credit-card companies are once again seeking to discourage dual pricing by pushing state legislation that dictates the labels merchants can use for such systems."

 

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