A federal judge on Wednesday upheld the city's latest anti-smoking effort.
U.S. District Judge Thomas Griesa ruled retailers can refuse to accept coupons discounting cigarettes and other tobacco products.
The same law also keeps the minimum price of a pack at $10.50.
City officials say the ruling is a huge victory for anti-smoking efforts.
However, the National Association of Tobacco Outlets says there is a long-standing tradition of rebates on tobacco products, and they are considering an appeal.
The law, which was passed last year, also makes 21 the minimum age to purchase tobacco in the city.
That provision was not challenged in the lawsuit.