Unfair credit card charges

Why are airlines continuing to slug us with excessive credit card surcharges?

Unfair credit card charges

Ken wants to know why Australian airlines continue to apply excessive surcharges for travel booked and paid for by credit cards.

Q. Ken

I remember signing a petition sometime last year asking Jetstar to drop its credit card surcharge for booking travel online. Why is it (and other Australian airlines) still charging excessive fees?
 

A.

You are correct Ken, despite efforts by the Reserve Bank, consumers are still being slugged excessive credit card surcharges by airlines, including Qantas, Jetstar and Virgin.

However, there is a flaw in the process as the responsibility for suppliers’ conduct in relation to excessive credit card surcharges is left to Visa, Mastercard, Amex, etc to pursue with banks who process transactions. And while the Australian Competition and Consumer Commission (ACCC) has overall responsibility for the conduct of suppliers, it simply refers such cases to the RBA, which actually has no real power to force companies to comply. So, it’s hardly surprising that very little is being done to stop the practice.

While the real cost of processing travel bookings averages around 0.81 per cent for each transaction (i.e. $2.02 on a $250 fare) airlines continue to charge up to $8.50 per person per credit card booking.

We made several attempts to contact Qantas which eventually replied to a post on our Facebook page. As you can see below, it has no intention of reviewing charges anytime soon, as it is charging within the RBA guidelines.

We also contacted the ACCC, but a representative was not available for comment as to the status of any subsequent action. 

If you would like to sign the petition calling for Jetstar to drop its credit card surcharge for booking online, visit Change.org.

Or for further details regarding the difficulties faced when trying to hold companies accountable, visit Choice.com.au.





    COMMENTS

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    Gwenevere
    24th Nov 2014
    10:24am
    While the air-line charges are not fair there is a really easy alternative when booking on-line through b-pay facilities and I have used this on many occasions and I use a debit card as I do not have any credit cards - paying surcharge on a $9 fare just didn't seem a good idea!
    Blossom
    24th Nov 2014
    11:50am
    That means that the fare may not be as cheap as you think it is. I would love to know if the banks charge their customers a fee for receiving money via credit card
    Oars
    24th Nov 2014
    1:14pm
    These money grobs seem to forget the reason that we adopted the use of Visa Cards and so on. The reason was to make easy access to funds to increase their market. Now that they have latched onto this "ease of payment" faciulity, they want more. It's like feeding a beggar with caviar- takes more and more. Back in the "slow pay days" these airlines had to wait weeks for a cheque,m which dented their cash flowe bigtime. Now they want their cake and the other bloke's cake too. There should be NO CREDIT CARD FEE, and any "transaction" costs should be absorbed into their business overheads- which must be less with this electronic payment system. Most businesses are happy to get the funds so quickly.
    Lescol
    24th Nov 2014
    3:54pm
    I suggest you just look at the 'bottom/all inclusive' cost of the ticket. Simple.
    doggone
    24th Nov 2014
    5:40pm
    greed on the part of the airlines - pure and simple.

    and, the government won't do a thing - don;t want upset their big end of town mates.


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