Beware of pre-Christmas payment surcharge rip-off

ACCC cracks down on excessive payment surcharging.

Beware Xmas surcharge rip-off

Businesses have been put on notice ahead of the Christmas shopping period, as the Australian Competition and Consumer Commission (ACCC) cracks down on excessive payment surcharging.

The ACCC issued its first formal infringement notices under the new excessive payment surcharging provisions to online trader Red Balloon, a company that sells ‘experiences’ online, last week.

More notices are expected to be issued in the coming weeks in a significant wake-up calls for retailers.

The ACCC alleged that on 31 March and 30 June 2017, Red Balloon charged four consumers excessive payment surcharges for payments they made by MasterCard credit, Visa credit, Visa debit and MasterCard debit respectively.

Under the rules, which came into force on 1 September, the surcharge on card purchases now has to reflect the true cost of the transaction to the merchant, not an artificially inflated sum designed to profit gouge. Businesses can only pass on to customers what it costs them to process a payment.

For example, if the cost of acceptance for Visa credit is 1 per cent, a business can only add a surcharge of 1 per cent for customers who pay with Visa credit.

Many businesses choose not to impose surcharges. Where they do choose to impose a charge for card payment, this needs to be made clear to the consumer.

As a guide, where a charge is imposed, consumers should expect to pay around 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. If charges exceed these ranges, the matter can be raised with the ACCC for investigation.

If people think they are being hit with an excessive surcharge when they go to the shops, buy tickets online or book a holiday, they should not hesitate to contact the ACCC on 1300 302 502.

Will you keep an eye on your credit card surcharges when you do your Christmas shopping this year? Have you ever been overcharged in the past?

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    COMMENTS

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    Graezie
    22nd Nov 2017
    10:39am
    What if they don’t charge for Visa but do for Amex then surely the Amex charge should only be the difference
    Old Geezer
    22nd Nov 2017
    11:18am
    I have an American Express card issued by one of the major banks and they are cancelling it in February due to the change in surcharges.
    PlanB
    22nd Nov 2017
    11:41am
    I was also issued with Amex and it was cancelled in August because of charges -- I can never understand why people think it is so great to have an American Express card --?

    It was offered to me at NO extra cost by my Bank and I did get more rewards points -- but so many will not take it OR charge a heap to let you use it --I always asked 1st
    Old Geezer
    22nd Nov 2017
    3:04pm
    Mine was the same.

    However just love all those Qantas points I get. Looking at airfares at the moment and are disgusted by the games the online booking sites play.

    Baggage says $28 per bag but when I delete the cookies it is $19 per bag. Airfares also get cheaper if I delete the cookies or use another browser. Maybe I should tell them I am in another country and see what it does.
    Snowflake
    22nd Nov 2017
    11:42am
    Why should there be any charges? I use my card all the time and don’t get charged anything so why is is different at Christmas
    Hasbeen
    22nd Nov 2017
    11:47am
    They need to check freight & handling charges too.

    I saw one from Hong Kong recently where a run out item was reduced from $120 to just $16, but the freight & handling charge jumped from $17 to $124. The purchaser said she had been so excited by the price reduction, she didn't think to check the freight charge.
    Rosret
    22nd Nov 2017
    12:00pm
    Ouch.
    Rosret
    22nd Nov 2017
    11:59am
    Who does this other than airlines and hotel/motels?
    Rae
    22nd Nov 2017
    3:46pm
    The newsagents and bookstores at the airports do. Not sure about other retailers there but I always pay cash if there is a surcharge on principle. It isn't my job to pay a businesses running costs which are tax deductible for them anyway.

    Tap and go is convenient but not at a 1.5% tax.
    Kiri
    22nd Nov 2017
    5:03pm
    I remember there was a big campaign against Jetstar but don't know if they were forced to make changes.
    It is an absolute rip-off because there is no other way to pay, especially if your book online. Even if you did a phone booking you'd have to pay by card.
    Time for a Royal Commission LOL!
    Old Geezer
    22nd Nov 2017
    7:35pm
    Yes Jetstar now have very small charges on their domestic flights but still have those big ones on international flights. II pay direct debit with no surcharge. Jetstar are now quoting big charges for luggage the more you check out their flights. Clear your cookies and they will be back to cheapest price. I did it earlier and it works. I clear my cookies before buying anything online.
    Kiri
    23rd Nov 2017
    12:07am
    Thanks Geezer, that's a good tip.
    Kathleen
    22nd Nov 2017
    12:04pm
    Coles MasterCard do not do this. I have done all our Christmas shopping as the sales are now before Christmas and I like to be organised. I have a budget for gifts throughout the year including Christmas because it is lovely to be able to give presents to the family. We now only keep to immediate family but that is still quite a lot. After Christmas is a good time to stock up on Christmas items like Bon bons, cards, etc as they are half price then.
    Old Geezer
    22nd Nov 2017
    3:01pm
    We save money on Christmas presents as we realised my years ago that none of us want such junk any more. As for bonbons, cards, wrapping etc then why use them just to fill up the recycle bin that goes who knows where. Half price is still to expensive for such rubbish.
    Kathleen
    22nd Nov 2017
    11:16pm
    OG,
    Are you familiar with “A Christmas Carol?”
    There is a character in there that could have been based on you.
    Dickens loved finding characters like you.
    Kiri
    22nd Nov 2017
    12:20pm
    I haven't noticed retailers adding on a surcharge, but I recently got hit when I booked a holiday. How can the travel industry get away with this, when the only way they accept payment is by card?
    Rosret
    22nd Nov 2017
    2:21pm
    I have often wondered that too.
    Old Geezer
    22nd Nov 2017
    3:09pm
    Service stations in Queensland are starting to add a small surcharge now too.
    Graezie
    22nd Nov 2017
    3:11pm
    No one has answered my query - should they be allowed to do a normal surcharge on Amex when they don't on Visa - isn't the difference the correct way eg Visa 1.5% Amex 2.5% - not charging for Visa so shouldn't Amex be only the 1% difference???
    Rae
    22nd Nov 2017
    4:04pm
    They shouldn't be able to do so anyway. Banking costs are tax deductibles. There is no need for a surcharge. It's like the $2 fee for paper accounts. I bet they still deduct the cost from their taxes.

    The tax office should check the paper work but I bet they don't.
    Greg
    22nd Nov 2017
    11:21pm
    It's a tax deduction not rebate, still has an actual cost to the business.
    Rae
    23rd Nov 2017
    9:21am
    Yes Greg and a cost to me I'm not prepared to pay either. Business should take it up with their bankers. It isn't my problem.

    It isn't my job to provide convenience to business and then get charged to do so.

    Imagine a small fee for using the self serve checkout or for pumping your own fuel. It's the same thing.

    Perhaps it suits these business owners to have a bit of cash money coming in.

    22nd Nov 2017
    4:19pm
    The world has gone mad with greed - the evils of hypercapitalism. Everybody is gouging everyone else. Welcome to the dystopia of the 21st century.