- Sep 21, 2019
Back in the bad old days, it was deemed that merchants were loading the purchase price of goods and services with the credit card surcharge, regardless of the payment type used (e.g. cash, cheques, debit cards). This in effect meant those who didn't pay by credit card were subsidising those who did. Hence the RBA made it illegal to include the surcharge in the purchase price but left it to the merchants to levy the surcharge separately if payment was by credit card. Their logic was that competition would keep a lid on price gouging (via the surcharge). As we all know, the reality is that there is a rort on this surcharging levy which sadly we as customers end up paying. The merchant's logic is that it will go towards their MSF (Merchant Services Fee) for accepting credit card payments. Good on you for complaining to ACCC. There needs to be a groundswell of complaints before the ACCC will do anything.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.
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What am I missing? Can businesses legally do this in Australia?