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Credit card surcharges with no alternative payment option?

Mattg

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A few years ago, the RBA ruled that businesses are allowed to charge credit card surcharges commensurate with the cost incurred by their bank. But my understanding was that an alternative, fee-free payment method needed to be available - otherwise the surcharge needs to be included in the up-front price. Am I mistaken?

I've seen several examples recently where a credit surcharge is added at the final payment stage, even though credit card is the only possible way to pay.

For example, when booking a flight with FlyPelican, they add on a credit card surcharge of 1% for Visa/Mastercard or 3% for Amex/Diners Club. But there is literally no other payment option provided. In this case, shouldn't the 1% surcharge by included in the up-front price - otherwise it's drip pricing because the total minimum charge is not displayed upfront?

It's not just airlines. I recently visited a restaurant which only accepted card payments - yet added a surcharge for this.

4E7675F6-4C17-4847-AB86-C277ED86297C.jpeg

What am I missing? Can businesses legally do this in Australia?
 

daft009

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Perhaps no cash is a temp thing due to covid (for the restaurant anyway)?
But yes my understanding is the same.

I've stopped accepting cheques due to covid. Not so much for the handling but due to covid my local branch has closed permanently, the next close one is shut due to renovations with no sign of reopening
 

trippin_the_rift

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Perhaps someone else can chime in on the legality of forcing surcharges, however, in my neck of the woods - businesses that have 'no cash' signs actually do accept cash, it's just that you won't receive any change so exact amount is required for payment.
 

GSP

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A few years ago, the RBA ruled that businesses are allowed to charge credit card surcharges commensurate with the cost incurred by their bank. But my understanding was that an alternative, fee-free payment method needed to be available - otherwise the surcharge needs to be included in the up-front price. Am I mistaken?

I've seen several examples recently where a credit surcharge is added at the final payment stage, even though credit card is the only possible way to pay.

For example, when booking a flight with FlyPelican, they add on a credit card surcharge of 1% for Visa/Mastercard or 3% for Amex/Diners Club. But there is literally no other payment option provided. In this case, shouldn't the 1% surcharge by included in the up-front price - otherwise it's drip pricing because the total minimum charge is not displayed upfront?

It's not just airlines. I recently visited a restaurant which only accepted card payments - yet added a surcharge for this.

View attachment 231340

What am I missing? Can businesses legally do this in Australia?

My understanding was they cannot, however we are not in normal conditions, so there maybe leniency given to businesses...how much that is taken advantage of I'm sure will vary.
 

equus

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What am I missing? Can businesses legally do this in Australia?
As to some of the later discussion in this thread, this would be legal because they have not said they don't accept cheques ;) (presumably with no surcharge). Whip out the cheque book and offer to pay them that way, and when they are not happy, point out that they have to offer a payment method that allows you to pay the disclosed price. I expect they will either accept cash, or waive the surcharge....
 

Mattg

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As to some of the later discussion in this thread, this would be legal because they have not said they don't accept cheques ;) (presumably with no surcharge). Whip out the cheque book and offer to pay them that way, and when they are not happy, point out that they have to offer a payment method that allows you to pay the disclosed price. I expect they will either accept cash, or waive the surcharge....

I'd be tempted to try this, except that I haven't had a cheque book for 10+ years!

Of course, this only could apply to bricks-and-mortar businesses. Paying by cheque isn't an option over the internet...
 

equus

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Of course, this only could apply to bricks-and-mortar businesses.
Don't know how long it is since I have written a cheque (many years) but still have the cheque books gathering dust in the drawer.

Take the point about bricks and mortar, but as your OP clearly depicted the bottom of a menu, I am assuming that it is such a business.

I bet their notice is probably non-compliant anyway. As worded, there are multiple surcharges, which as they are all defined separately should apply to the base bill. How much would you want to bet that if you dined on a Sunday, they try to hit you with 10% on the bill, then an extra 1.5% for a a credit card on the now increased total (so a total surcharge of 11.65% rather than the advertised 11.5%)?
 

GSP

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With a bit of planning prior and studying the menu. Work out what you are going to order and therefore the total price. Go to the bank and get a bank cheque to the establishment....that'll learn 'em!! :)
 

Skyhawk

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I'd say that I thought it was illegal and that if they proceeded to charge me I would report them.
 

Skyhawk

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Not sure. I'd have to make enquiries. I might not even proceed to actually report them.
 

Mattg

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Australian Financial Complaints Authority.


I had a look, but they don't appear to accept complaints relating to credit card surcharges. They seem to deal more with complaints against providers of credit (e.g. banks).

On their online complaint form, the first question asks you to enter the name of the financial firm or super fund your complaint relates to. There's no option to enter, for example, FlyPelican.

The RBA seems to say that the ACCC is the place to complain to. But I very much doubt they would investigate non-compliance at individual small businesses like restaurants.

I wonder if NSW Fair Trading might be a better option?

Edit: I've now contacted the ACCC to seek clarification.
 
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NM

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Sounds like the best place to make a complaint may be to the company imposing the surcharge (e.g. the restaurant), perhaps via their social media presence, noting your intention to boycott their business whilst they continue such practice.
 
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NoName

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I complained to the ACCC a couple of months ago about unreasonably high CC surcharges.

Was at a buffet style restaurant and when it came time to pay at the end they had what was termed the “preferred customer” price which was approx $35pp from memory and was for cash payments. The “non-preferred customer” price was $3 more. Of course this was just a surcharge for card payments despite whatever semantics the manager wanted to spout. On principal I argument with them about the >8% surcharge and pointed to the RBA regulations. They eventually refunded the money (presumably to put an end to the scene) and I promptly made a complaint to ACCC.
 

siri

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RBA made a hell of a mistake on this area which they later agreed that it was a bad decision. UK had same scenario and they reversed it later and now vendor cannot do so..
 

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