With the Reserve Bank’s ruling on excessive surcharges coming into effect for large Australian retailers on 1 September, the Surcharge Free collective of retailers, business associations and advocates is urging businesses across the country to end payment surcharges once and for all.
The Australian Competition and Consumer Commission (ACCC) has been tasked with enforcing the ban, which is aimed at reining in some of the $1.6 billion Australians pay in surcharges each year.
“The new law limits the amount a large business can charge customers for use of payment methods such as most credit and debit cards,” says ACCC chairman Rod Sims. “Businesses can only pass on the permitted costs of the payment method such as bank fees and terminal costs.”
For the first year the law only applies to large businesses, which are defined as having two of the following: gross revenue of $25 million or more, gross assets worth $12.5 million or more, or 50 or more employees. It will apply to all businesses from 1 September 2017.
The Surcharge Free movement
Consumer Advocate Christopher Zinn, who is leading the Surcharge Free movement, says he believes retailers should use this new law as a starting point and completely eradicate surcharging. He says retailers should focus on the dollars they will gain by fostering goodwill with customers, rather than the pennies they lose by not surcharging.
“While we’re all for anti-gouging measures, the new legislation doesn’t go far enough,” he says. “Surcharges are not a cost passed on to consumers in many other parts of the world, so why should Australians be expected to pay them?”
Research conducted by American Express in March this year shows that more than 90 per cent of Australians consider not being surcharged as important to their repeat business and 93 per cent of consumers would like to see surcharges removed altogether.
One in three rate not being surcharged as extremely important in their impression of a business, and almost 75 per cent of people will tell their friends and family to avoid a business because it surcharges.
“We’re calling on businesses across Australia to join the Surcharge Free movement and focus on the goodwill not surcharging creates with customers,” explains Zinn. “Ask yourself: why would you put your return business at risk?”
With the use of cards over cash increasing, encouraged by the emergence of new technologies like mobile wallets, savvy businesses are respecting their customer’s choice in how they want to pay, says Zinn.
Plus, with the cost of accepting card payments decreasing over time, Zinn says it makes competitive business sense to provide customers with the best possible service.
“Customers couldn’t be clearer—surcharging is an unwelcome sting in the tail of any purchase.”
To get involved in the Surcharge Free movement, head to surchargefree.com.au where you can get your company logo listed on the group’s website and download POS material to display to customers.
For more information on the law change, check out the ACCC’s online guide for consumers and businesses here.