Ever felt stung by a retailer adding a transaction surcharge because you use a card?
Most people have just accepted this surcharge as a minor annoyance however some businesses have been charging a lot more than the actual costs they pay for these services. These businesses have been scalping even more profit from you and pretending it is an imposed fee on them.
Early last year, after complaints from consumers, changes were proposed to the laws that Govern the Credit, debit and prepaid card surcharge. In September changes to the laws came into effect and the ACCC (Australian Competition and Consumer Commission) after a bit of a razz up from the Government took aim at those blatantly gouging profit by adding more than the surcharge.
The real cost for these transactions should be between 0.5 to 1 per cent for payment by debit card, 1 to 1.5 per cent by MasterCard and Visa credit cards and 2 to 3 per cent for American Express.
On their website, the ACCC use the airlines charging a flat fee for flight bookings as an example. These charges on some flights clearly exceed the actual costs imposed by the transaction with many domestic flights working out to be 5 or 10 per cent.
The new rules are designed to make sure business only charge what should be the true cost of the transaction and not to use the charge to cheat consumers and gain extra profit.
The ACCC has recently claimed its first scalp with a large merchant being issued with four infringement notices and $43,200 in penalties. The government understandably is keen to promote this crackdown and says there will be more business exposed and fined in the lead up to Christmas. Sending a clear message to unscrupulous businesses trying to rip off consumers over the festive season.
The ACCC recommends that if you are not happy with a payment surcharge first discuss the matter with the business. Remember, businesses are allowed to charge a payment surcharge, as long as it does not exceed their costs of accepting that payment type.
Consider paying using a cheaper payment method. If a business charges a payment surcharge, you may be able to avoid it by paying in a different way. Different payment types have different costs of acceptance, so some payment types may attract a smaller surcharge, or no surcharge at all.
If you believe you are being charged an excessive payment surcharge contact the ACCC on 1300 302 502.