H 7409Abuse & Fraud

Commercial Law - General Regulatory Provisions - Deceptive Trade Practices

This bill bans retail businesses from charging customers extra fees for using a credit card to make purchases.

Held for study

Population
Affected

Introduced Jan 30, 2026Committee House Corporations

Plain-English Summary

This legislation prohibits retail stores and service providers in Rhode Island from adding a surcharge fee to a customer's bill simply because they choose to pay with a credit card. Under this bill, adding such a fee is classified as a "deceptive trade practice." The law applies to any transaction involving the sale of goods or services that takes place within the state.

For younger readers

Sometimes when you go to a store to buy a toy or a snack, you might pay with cash or you might pay with a plastic card. Right now, some stores might ask you to pay a little bit of extra money just because you are using a card instead of cash. This new rule says that stores are not allowed to ask for that extra money anymore. If the price tag says five dollars, the store must charge you five dollars, even if you use a card to pay for it.

Who & Where It Applies

Impacted groups

Retail establishmentsConsumersCredit card usersSmall business ownersCredit card companies

Impacted communities

All

Constitutional & Fiscal Check

Moderate risk

There is a moderate constitutional risk based on the U.S. Supreme Court ruling in *Expressions Hair Design v. Schneiderman*. The Court found that laws prohibiting "surcharges" while allowing "cash discounts" regulate speech and must satisfy First Amendment scrutiny. If this bill is interpreted as regulating how merchants communicate price differences rather than just the conduct of charging more, it could be challenged as a violation of free speech.

Estimated cost

None

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

protects consumers, particularly those with lower incomes who rely on credit for necessities, from facing unexpected and punitive fees at the point of sale.
Increases fairness and transparency in pricing by ensuring the advertised price is the final price, preventing businesses from hiding operational costs in checkout fees.
Strengthens consumer protection laws against deceptive practices, reinforcing the government's role in shielding the public from predatory corporate behaviors.
May disproportionately harm small, local businesses that operate on thin margins and cannot afford to absorb credit card processing fees as easily as large corporate chains.
Could result in businesses raising base prices for all customers, meaning cash-paying customers (often the unbanked or poor) effectively subsidize the rewards points of wealthier credit card users.
Removes a mechanism that encourages consumers to use cash, which helps keep money within the local community rather than funneling transaction fees to large, multinational financial institutions.

For Conservatives

Protects consumers from hidden charges, ensuring that the agreed-upon price is honored without surprise additions at the register, consistent with honest dealing.
Simplifies commercial transactions by standardizing payment rules, reducing confusion and potential disputes between merchants and patrons.
Ensures a level playing field where businesses compete on the actual price of goods rather than adding backend fees to recoup operational costs.
Violates the principles of a free market by dictating how private business owners can structure their pricing and recover their operational costs.
Prevents businesses from transparently passing on the specific costs created by credit card companies, forcing owners to hide these costs in higher prices for everyone.
Represents government overreach into private contracts and commerce, limiting the freedom of merchants to incentivize cash payments through surcharge mechanisms.

Votes

Loading votes...

Full Bill Text

Changes to existing Rhode Island law · 4 additions

SECTION 1. Chapter 6-13.1 of the General Laws entitled "Deceptive Trade Practices" is hereby amended by adding thereto the following section: 6-13.1-31. Credit card surcharge prohibited. It shall be a deceptive trade practice in violation of this chapter for any retail establishment offering goods or services for sale to impose a surcharge fee on a customer who uses a credit card for a transaction occurring in the state.

SECTION 2. This act shall take effect upon passage.