Why You’re Still Being Surcharged on Your Debit Card in NJ

The other night I ordered a pizza delivery for my daughters and a group of their friends at the house. The bill for the pizzas and an order of wings came to $54.32.

I noticed later that the pizza place added an "ATM Operator Fee" of $1.90 to my debit card.

Wait, why am I paying a fee on a debit card? Aren't debit cards the same as cash? I thought they passed a law against this in New Jersey.

New Jersey's Law Limiting Credit Card Surcharges

In August 2023, New Jersey Gov. Phil Murphy signed into law a bill that limits the surcharges merchants may charge their customers who choose to pay for goods or services using a credit card and requires disclosure of the surcharge.

Surcharges are not legal on debit cards, but, the issue is how the restaurant or store processes your purchase.

Debit Cards Can Be Used as Credit Cards

I asked a friend in the restaurant business about my debit card being charged a fee and this is what he told me.

Although surcharges are not legal on debit cards, most debit cards have a Visa or Mastercard logo and can be processed as a credit card, and that’s how businesses get around this. They simply process your debit card as a credit card.

What If I tell the Business the Card is a Debit Card?

Many businesses will say that they have a policy of charging the fees on any card -- credit or debit-- because they can't be sure which it is at the time of the transaction.

I'm sorry, but this seems like an obvious ploy to charge a fee even when the establishment isn't being charged one.

"If You Don't Like It, Pay Cash"

If you ask a New Jersey business about charging a fee on a debit card, they will say if you want to avoid it, you should pay cash.

The whole point of a debit card is to use a card that's the same as cash. If it is the same as cash, why can't I use it without a fee instead of cash?

For this answer, I turned to NJMoneyHelp.com, although I didn't like what it said.

Where it gets sticky is that some stores, when they accept debit cards, only accept them as credit cards — where you don’t need to enter a PIN to use the card. In those cases, any complaint that you were charged a fee for using a debit card probably won’t fly.

But you can file a complaint with the state’s Consumer Affairs office.

Perhaps we need a way of distinguishing by card number a debit card from a credit card that makes it immediately clear which is which to any merchant and eliminates the confusion and the fees.