WASHINGTON—The Supreme Court on Thursday agreed to decide whether states can prohibit merchants from imposing a surcharge on customers who use credit cards.

Some businesses, particularly smaller retailers, prefer that consumers pay with cash because credit card transactions come with additional costs, known as swipe fees.

The merchants challenging the state laws say the prohibition on surcharges violates their free speech rights because it prevents them from communicating freely with consumers about pricing options. They say the laws mean they're not allowed to say they will charge credit card customers more, even though they are permitted to say they will offer a discount for cash purchases.

Lower courts have issued conflicting rulings on the validity of such laws, which are in force in 10 states, according to court documents.

The high court agreed to consider a case from New York, where that state's law is being challenged by a hair salon, an ice-cream parlor and several other businesses.

The Second U.S. Circuit Court of Appeals last year sided with the state and rejected First Amendment claims brought by the merchants. The appeals court said the New York law regulated business conduct, not speech.

The Supreme Court will review that ruling during its new term, which begins next week and runs through June 2017.

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

September 29, 2016 10:45 ET (14:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.