I’m always interested in free speech cases when they make their way through the court system, but this one is particularly unique. In a small town in upstate New York a beauty salon ran into a problem a couple of years ago. They listed their prices up front based on the cash price for services, providing a note saying that there would be an extra fee applied if the customer paid by credit card. They were advised by an attorney to take the sign down or change the wording because they were in violation of the law. That may sound fairly crazy, but it turns out the lawyer was correct and they wound up going to court, claiming that their right of free speech was being impinged. (Route Fifty)

The owners of Expressions Hair Design in Vestal, along with other New York businesses that have sued the state over the law, say their freedom of speech is being impinged on because they can’t explain to customers how credit card fees affect their bottom line.

Their case, Expressions Hair Design v. Schneiderman, is slated to come before the U.S. Supreme Court early next year. A decision in the case also is likely to be felt in nine states with similar laws (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma and Texas). And, given the reach of big retailers and the growth of online sales, it could influence how merchants in other states do business, too.

“All these laws are really doing is regulating speech in a way that favors credit card companies because it masks the costs of credit to consumers,” said Deepak Gupta, the consumer rights lawyer representing Expressions, where his mother gets her hair done. Under the laws, he said, “you can say the glass is half full, but you can’t say it’s half empty.”

This obscure bit of legislation is simply strange to begin with. The law doesn’t say that a business can’t charge more to customers using credit cards in an attempt to recover the cost of the transaction fees they have to pay. It forces them to list the credit card price as the “real cost” and then refer to the other option as a “cash discount.”

What’s the difference? In terms of what the consumer is going to pay… absolutely nothing. New York’s New York Attorney General Eric Schneiderman is quoted as giving the standard company line about how the law “stops businesses from adding fees” so it’s a consumer protection measure. This is, of course, nonsense. No matter what you call it, you’re still paying extra for using your credit card. These laws are a prime example of cronyism because the banking industry doesn’t want people seeing a sign saying you’ll pay more if you use your credit card.

In the end it all works out the same way. Businesses can either offer this sort of offsetting price structure to cover the fees or they can simply raise everyone’s prices to take the fees into account. In any competitive market however, even a small decrease in price can translate to greatly improved sales, so it makes sense for many businesses to use the two tier model.

But does this really fall under free speech? I’m honestly unsure about this one. The state government is telling you what you can or can’t say on a sign posted in your business so the default answer might be yes. But it’s also advertising and it specifically deals with product pricing. We have regulations which require merchants to accurately inform consumers what they will be paying for goods and services. That would seem to drag us into a gray area except for the fact that no matter which way you describe the price (as a credit card fee or a cash discount) you are still accurately providing the pricing information to the consumer.

We’ll put a bookmark on this one and wait to see what the Supremes do with it. It may seem trivial, but the law definitely sounds intrusive to me.