Absolutely ridiculous surcharging

[rechoboam]

Had a very pleasant evening in central Melbourne last night. Great restaurant - Grossi Florentini- no credit card surcharge there, bless them ,and while not cheap, very generous with all kinds of fancy little "gifts" coming out of the kitchen throughout the meal.

Contrast that with my hotel- I accept that the Sofitel and similar 5 star hotels in Melbourne will cost twice their US counterparts. But they have the gall to add a 1.5% credit card surcharge. Their fancy restaurant to my amazement does the same. I don't know what the margin is on a 50 dollar main course, but if you are going to charge that kind of money, why not raise the price to $51 and dump the freaking surcharge? You know I accept the surcharge at my local tech store which is probably making a 3 cent profit on the cable they are selling me but isn't this a bit different?

 

[Mal]

Yep. Absolutely ridiculous. But it is legal. Hopefully the rba is able to whip places into line once their inquiry completes.

Later i'll add the hoteliers associations response to the rba inquiry. Biggest read of tosh you will see this week.

There has already been a mooted Aff get together where we all check out at the same time from a hotel and pay in $5 notes. I think we need to revisit that as a subtle but effective protest.

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[Kevin Scrimshaw]

There has already been a mooted Aff get together where we all check out at the same time from a hotel and pay in $5 notes. I think we need to revisit that as a subtle but effective protest.

Great idea, but do it with 5c coins! I have a ton of the damn things and can't even use them in parking meters!

 

[Mal]

As promised earlier:

http://www.rba.gov.au/payments-syst...ard-surcharging/accommodation-association.pdf

The Accommodation Association of Australia (the Accommodation Association) is the national industry body for the Australian accommodation industry.

The Association’s members include major international hotel chains, including Accor Hotels, Mirvac Hotels and Resorts, Toga Hospitality, Mantra Group and InterContinental Hotels Group.

(so we've now established that they represent the Sofitel in this matter).

Many of Australia’s tourism accommodation businesses are struggling to be profitable. This is because of a downturn in tourism due partly to the global financial crisis and natural disasters such as major floods in Queensland and Victoria and Cyclone Yasi in Far North Queensland.

I can think of many other reasons ... but hey, let's choose the ones that are the best scapegoats.

Tourism accommodation businesses within Australia do not impose excessive surcharges on customers who pay by credit card for goods and services provided by these businesses.

Excessive? Hmmm, I'd love to debate that point.

In 2011, the vast majority of customers of accommodation businesses in Australia pay for accommodation, food/beverages and other services provided by accommodation businesses by credit card of electronic funds transfer at point of sale (EFTPOS).

EUREKA! They admit that it is a huge factor in the cost of business. When you have "the vast majority" paying by a payment mechanism, it automatically makes it a cost of running the business. Are most hotels charging guests that use both bottles of shampoo a "shampoo usage fee?" compared to those who only use one? NO!

The Accommodation Association notes that the Payments System Board is considering two possible options which would involve change – imposing a specific permissible cap or limiting surcharges to a reasonable amount.
19. The Association asserts that should the board decide to pursue either of these options, a major distortion of the current market across all businesses would be the likely outcome and this would, in turn, have the potential to impose significant unforeseen costs on the accommodation industry at a time when it is still in recovery mode from the global financial crisis and recent natural disasters in Australia.

There's those scapegoats again... And, didn't they earlier state that hotels "do not impose excessive surcharges" - so, what is their beef against "reasonable amount"?

There is intense competition among Australia’s tourism accommodation businesses and the quality and quantity of businesses within the industry are such that if the costs, facilities, style and type of a particular accommodation establishment are not to the liking of the customer, then he or she invariably chooses to stay at a competitor hotel, resort, motel, motor inn, serviced/holiday apartment, bed and breakfast, guesthouse, backpacker or time-share.
21. The highly competitive nature of the industry means that the imposition of additional costs on consumers – such as credit card surcharges – is a major decision for an accommodation business.
22. Similarly, the level of such costs is determined only once a number of factors are taken into consideration, notably cost recovery. Therefore, there is a strong element of self-regulation around fees and charges, including credit card surcharges, in Australia’s accommodation industry.

HAHAHAHAHAHAA. Right - "self-regulation"? IE - they notice a competitor introduces it, and copied?

On behalf of the industry, the Accommodation Association rejects any suggestions that tourism accommodation businesses are using credit card surcharges purely as a means of raising extra revenue or “profiteering”.

RIGHT - understood, wink, wink, nudge, nudge - I won't tell anyone else!

As well, the competitive nature of our industry means the practice of imposing credit card charges that represent significantly higher amounts than the costs of the business providing credit card services to customers is not sustainable. This contrasts with other sectors, e.g. taxis which have a payments system that is, effectively, a monopoly.

Hang on a sec here. Of course it is sustainable. Hotels are effectively a monopoly in many ways....

Richard Munro
Chief Executive Officer

My hero....

 

[rechoboam]

Yep. Absolutely ridiculous. But it is legal. Hopefully the rba is able to whip places into line once their inquiry completes.

Later i'll add the hoteliers associations response to the rba inquiry. Biggest read of tosh you will see this week.

There has already been a mooted Aff get together where we all check out at the same time from a hotel and pay in $5 notes. I think we need to revisit that as a subtle but effective protest.

Sent from my GT-I9100 using AustFreqFly

Well I am glad it's not illegal. I don't think the government has a role telling the hotels how to draw up a bill. But I will feed back to the SOfitel that I don't appreciate it. I had a business stay in Sydney with Accor recently and they seriously expect me to pay in cash?

 

[lovestotravel]

Totally agree that surcharging in any business is just pathetic!

Just raise the damn prices by $1 for every $100 and be done with it

Less and less people are paying cash

 

[medhead]

Great idea, but do it with 5c coins! I have a ton of the damn things and can't even use them in parking meters!

You can only pay a maximum of $5 with 5c pieces.


Sent from my iPhone using Aust Freq Fly app so please excuse the lack of links.

 

[straitman]

You can only pay a maximum of $5 with 5c pieces.


Sent from my iPhone using Aust Freq Fly app so please excuse the lack of links.

OK $5 notes and 100 X 5 cent pieces.

 

[medhead]

OK $5 notes and 100 X 5 cent pieces.

It could also include 10x$1 and 10x$2. But maximum of $5 for any combination of 5c to 50c. I think the best way would be to get those rolls of coins from a bank and then crack them open at the desk when paying.


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[rechoboam]

It could also include 10x$1 and 10x$2. But maximum of $5 for any combination of 5c to 50c. I think the best way would be to get those rolls of coins from a bank and then crack them open at the desk when paying.


Sent from my iPhone using Aust Freq Fly app so please excuse the lack of links.

I'm having to use a lot of taxis at the moment and I hadn't really thought about the TEN PERCENT surcharge much before. Now THAT is ridiculous.

 

[medhead]

I'm having to use a lot of taxis at the moment and I hadn't really thought about the TEN PERCENT surcharge much before. Now THAT is ridiculous.

While I think negative thoughts about cabcharge. I also think that the surcharge is justified in part because the in cab payment system was developed by cabcharge from the ground up and hence would have cost a heap. Now having said that it is hard to explain why they were giving the system away free and some other potentially dodgy things that the ACCC have investigated.


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[Stephen65]

I'm having to use a lot of taxis at the moment and I hadn't really thought about the TEN PERCENT surcharge much before. Now THAT is ridiculous.

I always pay for taxis in cash. Not just to avoid the CC surcharge but because of the high incidence of credit card skimming and fraud associated with taxis.

 

[Mr_Gimlet]

I stayed at the Sofitel a few weeks ago. They charged me 1.5% but it was refunded a few days later. I think my employers have a deal which means many other companies might have as well.

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[Travel Guru]

Totally agree that surcharging in any business is just pathetic!

Just raise the damn prices by $1 for every $100 and be done with it

Less and less people are paying cash

I'd have to disagree with you on that one, yes in many industries (including hotels) a surcharge isn't warranted and is in my opinion taking advantage of the client, but its a bit of a simplistic look at things to just say raise the prices to absorb the cost of credit cards when in many industries it's just not viable to do so.

If you look at travel sales (and while I am in travel, I'm not in a retail store front dealing with the general population anymore...praise the lord!) it isn't viable to increase a price by 1-2.5% (depending on card) as it'll just make every quote you do uncompetitive with those who don't build it in.

In areas such as travel (and there are many other industries I can think of), it's the customers choice to pay by card, cash or eft transfers are just as readily accepted (and I accept that for hotels that's not the case) so why should the retailer wear 1-2.5% out of what can be a 7-8% margin just so you can get your points?

Everyone's happy to earn their points on their cards, but it all has to be paid for somehow and while some industries make whopping great margins and can afford to write off a lazy 2.5%, a great many don't and can't.

I totally agree that hotels charging CC surcharges are gouging, as are those who use the CC surcharge laws as a means of increasing revenue by charging a surcharge over and above the cost worn by the merchant, but I dont think the answer is to merely expect an individual merchant toe to absorb it into their costs, if that is infact the answer it has to be mandated and done across the board so that no individual retailer or service provider is disadvantaged within their industry.

TG

 

[oz_mark]

I'd have to disagree with you on that one, yes in many industries (including hotels) a surcharge isn't warranted and is in my opinion taking advantage of the client, but its a bit of a simplistic look at things to just say raise the prices to absorb the cost of credit cards when in many industries it's just not viable to do so.

If you look at travel sales (and while I am in travel, I'm not in a retail store front dealing with the general population anymore...praise the lord!) it isn't viable to increase a price by 1-2.5% (depending on card) as it'll just make every quote you do uncompetitive with those who don't build it in.

The question is, what percentage of sales made, in your experience, are made thorugh credit cards? I hold a position, that in some industries (hotels, airlines), the majority of transactions are conducted using credit card payments, and the idea of a surcharge is simply a way of increasing prices but laying the blame elsewhere.

I think that surcharging is going down the path that bank exception fees did - start off small, but keep increasing them until such a time as someone takes action. Eventually, surcharging will get out of hand, and something will be done, but whether that is now, or down the track remains to be seen.

As for me, I have a bit of an issue with many utlilty bills that don't charge the surcharge there and then, but add it on to the next bill.

 

[Travel Guru]

The question is, what percentage of sales made, in your experience, are made thorugh credit cards? I hold a position, that in some industries (hotels, airlines), the majority of transactions are conducted using credit card payments, and the idea of a surcharge is simply a way of increasing prices but laying the blame elsewhere.

I think that surcharging is going down the path that bank exception fees did - start off small, but keep increasing them until such a time as someone takes action. Eventually, surcharging will get out of hand, and something will be done, but whether that is now, or down the track remains to be seen.

As for me, I have a bit of an issue with many utlilty bills that don't charge the surcharge there and then, but add it on to the next bill.

At a guess, and it's only a guess, 30-40%.

I totally agree with you that those who take payment almost exclusively should not be charging a surcharge, and as for those who provide no other means of payment it should be illegal.

TG

 

[Mal]

I hold a position, that in some industries (hotels, airlines), the majority of transactions are conducted using credit card payments, and the idea of a surcharge is simply a way of increasing prices but laying the blame elsewhere.

Indeed. In my post above:

In 2011, the vast majority of customers of accommodation businesses in Australia pay for accommodation, food/beverages and other services provided by accommodation businesses by credit card of electronic funds transfer at point of sale (EFTPOS).

"vast majority". I'm sorry - once that line comes out, you know that it is a legitimate business expense.

Let's flip the coin and the Sofitel refuses to accept credit cards. What happens?

Crickets, silence, people leaving without paying. No prepaid advance bookings (some hotels still do charge a surcharge on advance bookings, which can be construed as illegal)

I think it's simple to see that credit card surcharges in hotels is not appropriate, and it is a legitimate cost of doing their business.

 

[oz_mark]

I think it's simple to see that credit card surcharges in hotels is not appropriate, and it is a legitimate cost of doing their business.

I'd argue the same with rental cars. The use of credit cards is embedded into their business processes.

 

[Mal]

I'd argue the same with rental cars. The use of credit cards is embedded into their business processes.

... and registration recovery, and stamp duty, and ....

The smart people notice that credit card surcharges are often aimed at business travel (airlines, hotels, car rentals in particular). I can't see how it isn't revenue raising.

 

[m_ratt]

I'm having to use a lot of taxis at the moment and I hadn't really thought about the TEN PERCENT surcharge much before. Now THAT is ridiculous.

11% when you consider that GST is also charged on top of the 10% surcharge (except if charging to a CabCharge card).

I read a few weeks ago, an article mentioning CabCharge fees.
I don't remember the source, but it was along the lines of 50% of the fee going to CabCharge to cover the cost of the service and card processing, and 50% to the taxi driver as an incentive to accept credit cards. (With the logically false assertion that if the driver didn't receive that incentive to accept credit cards, no driver would due to the cost of doing so).

While I can accept that a larger % surcharge may be necessary in the taxi industry to cover the costs of using mobile terminals, I can't accept that a surcharge is used for more than cost recovery (ie supplementary income).