Gov. targets unfair credit card surcharges

[Milefest]

So you think it fair that for you to buy your $1.50 stick of gum, that costs the merchant up to $0.60 in merchant fees and you think that's your right?

Yes because if your business is failing due to people too many buying gum on card, you have much bigger problems.

Your argument also assumes two things:
1. The customers are buying one item at a time at a low cost
2. The merchant is paying a fee per use of the gateway

Even if it was a problem for a business, increasing the cost of other items to subsidise the cost of transaction fees would be a smarter move.
Otherwise you might as well start adding separate charges for electricity, water, plumbing, freight and staff costs depending on the resources necessary to provide that particular item in store.

 

[Pushka]

Otherwise you might as well start adding separate charges for electricity, water, plumbing, freight and staff costs depending on the resources necessary to provide that particular item in store.

No, those items are cost of business and which determines the price - when paid in cash. Other forms of payment incur an additional cost to the business. Or do we go back to the post saying that everyone should be charged the same and cash payers subsiding credit card payers.

 

[ComeFlyWithMe]

Yes because if your business is failing due to people too many buying gum on card, you have much bigger problems.

Your argument also assumes two things:
1. The customers are buying one item at a time at a low cost
2. The merchant is paying a fee per use of the gateway

Even if it was a problem for a business, increasing the cost of other items to subsidise the cost of transaction fees would be a smarter move.
Otherwise you might as well start adding separate charges for electricity, water, plumbing, freight and staff costs depending on the resources necessary to provide that particular item in store.

1. They would without a minimum.

2. They are. Eftpos transactions are charged per transaction.

In price sensitive markets and a downward economy, increasing prices is not a smart strategy, but YMMV.

 

[Milefest]

Appreciate your opinions on the topic

No, those items are cost of business and which determines the price - when paid in cash. Other forms of payment incur an additional cost to the business. Or do we go back to the post saying that everyone should be charged the same and cash payers subsiding credit card payers.

There a certain products that require more resources to provide to customers than others. Businesses adjust the products to the prices to cater for these costs.. just like successful business that don't charge for transaction fees.

Cash can be expensive for a business too as there are insurance costs, labor costs for counting the money/continual cash drops, human error by giving incorrect change, buying/maintaining a safe etc.

1. They would without a minimum.

2. They are. Eftpos transactions are charged per transaction.

In price sensitive markets and a downward economy, increasing prices is not a smart strategy, but YMMV.

Most places I go to don't have a minimum because either they understand that providing a broader payment method is more important than losing customers over a piece of gum (which in most cases wouldn't even be a loss anyway).

Also not all Eftpos transactions incur a fee, it really depends on which terminal provider you're using and the contract etc.

On another note regarding a minimum, enforcing a minimum purchase with visa/mc etc. only increases the fee per transaction, as it's generally a % cost.
You might be able to argue that these costs can be moved to the customers, but as you said, in a price sensitive market this could also reduce customers that want to pay on card.

Customers payment methods are quite predictable and it's not very hard to adjust product prices to match the cost. In most cases it would be a matter of cents.

 

[trippin_the_rift]

And if you're trying to make $$$ on every item you sell maybe it's time to explore new revenue opportunities that likely exist within your exisiting store that you haven't yet tapped (happy to assist in this with my usual advisory fee)
7-11 for example you can put a 10c item on Amex no problem. They make $$ through other means before you even set foot inside the store so merchant costs are not an issue

 

[exceladdict]

Somewhere Mrs Excel worked used to have a lot of success encouraging people to spend more by having an eftpos minimum just above their traditional 'average purchase price', or else incur a 50c surcharge.

Most would prefer to buy a $2 pack of gum, to go back to the analogy, than spend $0.50c on a surcharge, to get over the $10 minimum.

Worked quite well for her manager, actually.

 

[JohnK]

Small business aside I cannot understand the logic behind surcharges. If you can't absorbe 1%-2% there's something wrong.

No, those items are cost of business and which determines the price - when paid in cash. Other forms of payment incur an additional cost to the business. Or do we go back to the post saying that everyone should be charged the same and cash payers subsiding credit card payers.

Everyone should be charged the same price. If you then want to provide a discount to pay by cash then by all means do so.

Surcharges are awful. Component pricing is awful.

 

[Pushka]

We are in small business. The charges for us to use credit facilities are much higher than 1-2%. Plus there is % withheld from every transaction to account for 'returns' even though we are a service and not goods business. More transactions = better rates.

 

[DaveB]

I make it mandatory for all ongoing suppliers to at least accept Visa.
A supplier this week where I make up most of his business scored 1.4% from one of the Big 4, another in same boat created for our account was charged 1.2% when setup early this year.

 

[ComeFlyWithMe]

Business failing is different to being profitable. Being profitable is important to ensure the business is sustainable. There is little point screwing your suppliers out of their 1-3.5% (actual merchant rates they might be paying) if they then can't turn a profit and then close that business.

We already look after our customers with 10% margins. If they want to screw us down by another 1.4% we simple aren't interested in their custom.

Businesses with high margins can absorb these fees sure, but smaller businesses who need razor thin margins to compete can't.

Either way, under the new rules, passing on the cost in a surcharge is still allowed so I will still do it. If it is no longer allowed, we won't accept credit cards any longer.

The point is, don't assume you know what the merchant is paying, and don't assume what their margin is.

Small business used to be the lifeblood of the nation, however now people go to a faceless multinational to save a few bucks. Boy I'm glad that 90% of our revenue is services and we can charge what we are worth.

Not much point as a small business selling stuff these days with consumers such as yourselves objecting to a business recovering their cost to take your high end black Amex card.

 

[JohnK]

Life is tough.

I can't find a job in Sydney so I work in Brisbane. No one pays for my costs.

I could just as easily sell everything and move it all offshore then live nicely off benefits. Why do I bother commuting where I lose ~50% of my already low salary?

And I don't care the ATO deems that I am in full time employment. It makes no sense. I know a number of AFFers who are in similar jobs yet get all their expenses including expensive hotels paid for their company and fully tax deductible.

 

[ComeFlyWithMe]

Life is tough.

I can't find a job in Sydney so I work in Brisbane. No one pays for my costs.

I could just as easily sell everything and move it all offshore then live nicely off benefits. Why do I bother commuting where I lose ~50% of my already low salary?

And I don't care the ATO deems that I am in full time employment. It makes no sense. I know a number of AFFers who are in similar jobs yet get all their expenses including expensive hotels paid for their company and fully tax deductible.

Sounds like you need to find a half decent accountant.

Here's a few tips: become a contractor, start work at home (check a few emails will do), do more work when you get home (more emails perhaps), then perhaps your Brisbane job is your second workplace and travel becomes deductible.

 

[JohnK]

Sounds like you need to find a half decent accountant.

Here's a few tips: become a contractor, start work at home (check a few emails will do), do more work when you get home (more emails perhaps), then perhaps your Brisbane job is your second workplace and travel becomes deductible.

I wish it were that simple.

 

[dajop]

Lots of discussion about small businesses etc and supplier type businesses where perhaps credit cards are not an integral part of the business model. Fair enough on credit card surcharges that reflect the cost to the merchant. However the one that annoys me the most is where credit cards are integral to the business model - for example hotels. Whether it be allowing people to secure reservations and not turn up without cancelling by deadlines, or whether it be providing security against "doing a runner" and/or protection against in hotel charges and minibar it would seem credit cards have become an integral part of the hotel business model. Thus applying blanket surcharges seems to me just taking cream off the top - gouging because other payment methods are far less convenient. Ironically it seems to be the big players not so much the small ones that do this.

 

[Pushka]

I think its annoying where you cannot book something without a credit card (eg Hotel) and then you get whacked with a fee for using it. No BPay on offer.

 

[yohy?!]

Somewhere Mrs Excel worked used to have a lot of success encouraging people to spend more by having an eftpos minimum just above their traditional 'average purchase price', or else incur a 50c surcharge.

Most would prefer to buy a $2 pack of gum, to go back to the analogy, than spend $0.50c on a surcharge, to get over the $10 minimum.

Worked quite well for her manager, actually.

there's a new word for that practice now

Urban Dictionary: theftpos

 

[medhead]

I wish it were that simple.

It pretty much is that simple. I've managed to claim maybe 20% of my flights/travel by simple changes to my arrangements.

 

[serfty]

It pretty much is that simple. I've managed to claim maybe 20% of my flights/travel by simple changes to my arrangements.

I have been down that track before ... to paraphrase "You can show the horse the path to the water, but you can't make them go down it ..." ...

 

[JohnK]

I have been down that track before ... to paraphrase "You can show the horse the path to the water, but you can't make them go down it ..." ...

It's not that simple. Seriously.

I am a full time employee whose job is in Brisbane. Company not interested in employing me as a contractor.

Not that simple to create 2 pseudo jobs that may allow me to claim some of the flight and accommodation costs.

So that rules me out of any benefits afforded to someone who reads their emails in Sydney and works in Brisbane which is a shame because if I wasn't commuting I wouldn't have a job.

 

[medhead]

I have been down that track before ... to paraphrase "You can show the horse the path to the water, but you can't make them go down it ..." ...

Oh, yeah. I'm a hearing ya in FM.

It's not that simple. Seriously.

I am a full time employee whose job is in Brisbane. Company not interested in employing me as a contractor.

Not that simple to create 2 pseudo jobs that may allow me to claim some of the flight and accommodation costs.

So that rules me out of any benefits afforded to someone who reads their emails in Sydney and works in Brisbane which is a shame because if I wasn't commuting I wouldn't have a job.

Seriously it IS that simple. I am in EXACTLY the same boat. Full time employee, Job in a different city. No 2 pseudo jobs. No reading emails at home to justify claiming travel. Have claimed at least 20% of my travel.

But as per Serfty - no point talking to you because as you are not interested in listening.