Card payment fee charged when booking a Qantas Classic Flight Reward

[Mattg]

We all know that taxes & carrier charges must be paid in addition to the Qantas points when booking a Classic Flight Reward.

I recently had to make a reward booking over the phone (as the route I wanted was not available online), and in this case the only payment method available is by credit card. Despite this, Qantas still added a card payment fee. I was under the impression that it was illegal and considered drip pricing to add a credit card surcharge right at the end of the booking process when no other payment options are possible?

I put this question to Qantas Customer Care, and (eventually) got the following reply:

I regret you were unaware of this policy and I have investigated this matter and can confirm that Payment options that don't incur the card payment fee:

• POLi
• BPAY for bookings made at least 7 days before departure;
• Qantas UATP; or
• Credit voucher.

You may refer to this link for the Card Payment Fee.

I have also verify that for Classic Flight Reward flights, taxes, fees and carrier charges are payable in addition to the Qantas Points required, are subject to change and are quoted at the time of booking. For domestic Australia flights and international flights from Australia, you can use Qantas Points for taxes, fees and carrier charges on qantas.com only and ‘Search Classic Flight Rewards' is not selected.

For domestic New Zealand Classic Flight Rewards, you can use points for taxes, fees and carrier charges on qantas.com only and ‘Search Classic Flight Rewards' isselected. You may refer to this link for theClassic Reward Booking.

We do provide information about our card payment fee on our website at Schedule of Fees | Qantas AU to relevant page of qantas.com. You may wish to check this next time you book, so that you are better prepared.

So, apparently this is all my fault for not being aware of their policy. Unfortunately, the reply doesn't actually address the fact that none of the fee-free payment methods they've listed are available when booking a Classic Flight Reward over the phone.

Does anyone know if Qantas is actually allowed to add a credit card surcharge in this instance?

 

[ChrisFlyer]

Velocity adds a credit card fee too when booking classic flight rewards online when the only other option is to use Velocity points to cover the tax!

 

[oz_mark]

Does anyone know if Qantas is actually allowed to add a credit card surcharge in this instance?

I'm aware there are a few different opinions on this, so I am just passing on what I was advised.

As there may be different cards with different surcharges, they can get away with stating the ascertainable amount. Once they know the card, and hence the surcharge, it can be added on.

I know others have been given different advice. Not sure if there have been any court rulings on this.

 

[N860CR]

Typical Qantas response. It’s actually all your fault you know? In fairness... We continue to do business with them so maybe it is our fault!

Send it to the ACA.

 

[TomVexille]

I booked an award ex ORD the other day and there was no card payment fee. However I assume that is because it was booked on their US site

 

[Mattg]

Well I've put the question to the ACCC via their online contact form. Apparently they will get back to me in around "15 business days".

 

[VPS]

I had an issue that I emailed the ACCC about and I got the reply in less time than that although I did get the around 15 business days email

 

[Must...Fly!]

As far as my very limited knowledge extends it is not illegal to be compelled to pay a payment surcharge as long as the cost is no higher than the cost to the business of processing the charge.

Will be interesting to see what the ACCC say.

 

[MEL_Traveller]

As far as my very limited knowledge extends it is not illegal to be compelled to pay a payment surcharge as long as the cost is no higher than the cost to the business of processing the charge.

Will be interesting to see what the ACCC say.

But how can you advertise a price which cannot be achieved? If card payment is the only option, should not the price indicate ‘plus mandatory credit card fee’? Or why not just increase the price by 1% and make it free free?

 

[I love to travel]

Aren't online rewatd bookings fee free though? Why would you then discriminate between online and over the phone!

 

[Must...Fly!]

But how can you advertise a price which cannot be achieved? If card payment is the only option, should not the price indicate ‘plus mandatory credit card fee’? Or why not just increase the price by 1% and make it free free?

Good point but I guess it depends if the cards available to pay with have different surcharges? If Qantas is advising of the surcharge at the earliest possible opportunity (i.e. once you've told them the card you're paying with), would it still be hiding the true cost, or just practical?

 

[MEL_Traveller]

Good point but I guess it depends if the cards available to pay with have different surcharges? If Qantas is advising of the surcharge at the earliest possible opportunity (i.e. once you've told them the card you're paying with), would it still be hiding the true cost, or just practical?

But the issue remains that the 'price' is never possible. They say 50,000 miles plus $500, but there's no way you can achieve that. It's going to cost you at least $505. Some might think that's inconsequential, but you multiply that by the 5 million award seats or whatever QF says they have available.

Maybe CC fees vary... but maybe tey should just wear the cost of the CC fee spread? Include the 1% for everyone and absorb the difference?

What if Woolies advertised prices but you could never get it without a CC surcharge, no cash or other option available?

 

[Must...Fly!]

I agree they should just incorporate the fee in to the original price, but that's not so much the problem. Qantas is after all a customer of the card providers and if incorporating the fee then in one way or another those with the lower fee cards (Visa/MC debit) will end up subsidising those using higher fee cards (Eg. Amex, Diners)

 

[eastwest101]

I think the crucial question to ask QF and the ACCC is when making that particular classic reward booking, which appears online but cannot be completed online, andso therefore must be done over the phone, is:

Is it possible to pay by BPay, Poli or a gift voucher over the phone when the agent is making that classic reward booking... I suspect the answer is no.

I agree with what the OP is saying - the way the Qantas online reservation system and the human reservation system works effectively means that Qantas are advertising a product at a price that is actually unacheivable.

 

[Mattg]

Well I received a reply from the ACCC. Here's an excerpt of the crucial parts (my bolding):

Thank you for writing to us about your Airline booking. We can offer you information about your consumer rights and how to resolve a dispute with an airline. Businesses are generally free to apply surcharges for credit card payments for products or services. If a surcharge is applied, it should not be excessive. If the business applies a surcharge to a transaction that is unavoidable, the fee should be included in the total minimum price you must pay.
--
When a business displays or quotes prices, it must clearly state the minimum total price that you have to pay. The ‘total price’ must include fees, duties and taxes that apply to all sales (such as GST or any compulsory processing fees). It must also include any optional fees or charges that have been preselected in the booking or purchase process (unless and until you deselect them).

Businesses don’t have to include charges that might not apply (such as a delivery charge that you can choose to add on).

If a business displays or quotes a price that is only part of the total price, the total price must be displayed just as clearly.

Businesses don’t have to comply with this rule when they are selling things that consumers don’t normally buy (such as a business grade photocopier), or when advertising or quoting exclusively to other businesses.

The issue, as I see it, is not the credit card surcharge per-se. But rather that Qantas (and Velocity, it would seem) don't include this in the price up-front when there is no other payment method available. The credit card surcharge is added on at the end as an extra fee. If the issue is that there are different fees for different types of card payments, then legally the lowest surcharge amount should be included in the price quoted at the start of the booking process.

I've written back to Qantas and will see what they say. I'm expecting another "sorry that you're wrong" reply (or no reply at all).

 

[eastwest101]

Well I received a reply from the ACCC. Here's an excerpt of the crucial parts (my bolding):



The issue, as I see it, is not the credit card surcharge per-se. But rather that Qantas (and Velocity, it would seem) don't include this in the price up-front when there is no other payment method available. The credit card surcharge is added on at the end as an extra fee. If the issue is that there are different fees for different types of card payments, then legally the lowest surcharge amount should be included in the price quoted at the start of the booking process.

I've written back to Qantas and will see what they say. I'm expecting another "sorry that you're wrong" reply (or no reply at all).

Seems pretty clear to me - the surcharge is there only at the end of the booking and is unavoidable - therefore go directly to drip pricing, do not pass go and do not collect $200 etc. Why do the ACCC want you to do their job for them? They are the regulator, and time for them to get off their butts and start making their own inquiries. Whatever the response that Qantas offers is now irrelevant, they are in breach of consumer law,.

 

[sudoer]

Happened to me on the weekend also - booked an MMY-HND classic reward, the QF website does not support searching for flights to/from MMY so only option was for an agent to book manually. (and they conceded this when agreeing to waive the booking fee)

Initially called and was told no availability (knew this was BS - JL and BA both showed space) so tried the SMS line.

The agent quoted taxes at $3.90 and only gave the option to pay via card, charge hit the card as $4.00. Not losing any sleep over the 10c but agree they shouldn't be doing this, and I'd be more upset if the surcharge came through on a multiple-hundred charge in taxes.

YOUR AIRLINE RECEIPT:
FARE: JPY 0
TAXES/FEES/CARRIER CHARGES AUD 3.90

TOTAL: AUD 3.90
FEE: AUD 0.10 OB FCA CARD FEE
GRAND TOTAL: AUD 4.00

 

[Mattg]

Well I received a reply from Qantas. Pretty much as expected. Here it is:

Thank you for your response to our email.

While I do understand your disappointment, in my previous response I outlined the reasons why there is a charge for a Card Payment Fee when booking a Classic Reward Booking as stated that “For Classic Flight Reward flights, taxes, fees and carrier charges are payable in addition to the Qantas Points required, are subject to change and are quoted at the time of booking.” This means that this can be paid using cash and unable to be paid using points. And also as per checking that card payment fees is visible on our website where our customers have the visibility to check regarding how much would be the charge for the booking when they are using a credit card. You may refer to this link for More information about Classic Flight Rewards. You may also refer to this link for the Schedule of Fees.

I have also che checked under the Qantas Policy that the card payment fee applies per ticket per card to:

• Commercial tickets issued in Australia or New Zealand on Qantas ticket stock (the ticket number starts with 081);
• Classic Flight Rewards issued in Australia;
• Where Qantas is the merchant (where Qantas Airways will appear on the cardholder’s statement); and
• The ticket is paid for wholly or partly using a card.
• Where multiple credit cards are used for the one ticket, the Card Payment Fee is charged once
• PayPal Points of Sale is AU & NZ incur a payment fee.

Thank you again for taking the time to write to us, I am sorry for your disappointment but I’m afraid we are unable to change our position at this time.

I have now sent them a link to this page of the ACCC website and asked them to clarify how quoting an unavoidable surcharge only at the end of the booking process complies with Australian law. I'm not holding my breath for a response...

 

[Mattg]

After yet more "back & forth" with Qantas Customer Care, the rep sent me a reply informing me that the Qantas website states that taxes, fees and carrier charges apply when booking a Classic Flight Reward. Therefore, the credit card surcharge is totally fine.

My issue is with Qantas adding the credit card surcharge to bookings over the phone (not on the website, where there are fee-free payment options) and not including this in the upfront price. Yet, after half a dozen emails, QF customer care still haven't actually bothered to address this. Instead, I just keep getting canned replies from somebody that I'm not convinced has a clue what they're talking about.

I replied yet again, making it clear that I was specifically talking about the surcharge applying to bookings over the phone, and included some relevant quotes from the ACCC website. The reply I received doesn't even really make sense:

Thank you for your response to our response.

I’m sorry if you thought that responding to our letter you would receive a different outcome, but I’m afraid this is our final position on the matter as the Credit Card Fee is visible on our website wherein if the contact centre agent is unable to provide the Credit Card Fee it is the customer liability to check on our website regarding the fees that will be associated when creating a booking. Please note that a company can be liable for a fee that they are charging to the customer if the fee is not visible or accessible on the website of such company.Hence, Qantas was able to provide the necessary information on the website which everybody can access.

You may refer to this link for the Schedule of Fees

This means under the ACCC the price of the Card Payment Fee is displayed as such being being mentioned on the link of ACCC.

This means under the ACCC the price of the Card Payment Fee is displayed on our website as such being being mentioned on the link of ACCC that you have provided.

Thank you again for taking the time to write to us, I am sorry for your disappointment but I’m afraid we are unable to change our position at this time.

I'm not really sure what to make of this or how to proceed from here. Clearly nothing will be gained by continuing to deal with Qantas Customer Care, because they don't care.

 

[Kangol]

Aren't online rewatd bookings fee free though? Why would you then discriminate between online and over the phone!

Online award tickets do have a credit card fee. The same cc fee as booking on the phone.
There is no discrimination FYI.
I made one this month - pretty sure they announced this very issue when they made the changes to include the cc fee.