Desperate Tiger ups credit card fee...

[oz_mark]

It's definitely not just airlines doing this; since the RBA opened the flood gates credit card surcharging has become the norm rather than the exception. It's really only the major retailers who DON'T have a surcharge, and it wouldn't surprise me if that changes in the future.

While that is all true, it does seem to be the airlines (and taxis for different reasons), that have gone a bit OTT with the charges for credit cards. The fact that they have moved to a flat surcharge of one form or another means that in many cases they are over recovering the actual costs to them of using credit cards.

Perhaps it is because most surcharges are flat fees (fuel, passenger movement charges, etc etc etc), that it is done tis way.

 

[dajop]

It's definitely not just airlines doing this; since the RBA opened the flood gates credit card surcharging has become the norm rather than the exception.

I find this contrary to my experience, unless it has changed in the 4 months since I haven't been living in Australia. All the small retailers I usually/used to shop at don't charge it, many restaurants don't (although some do for Amex), my hairdresser doesn't (although he doesn't take Amex), I pay my water bill no surcharge, hotels don't, car hire don't. The most common surcharging I find is for Amex but nothing for Visa/Mastercard (and the telcos do of course). Also I do find that the sort of businesses that thrive as part of the cash economy place significant surcharges on cc usage, I think solely to encourage payment of cash, for obvious reasons.

It is a contrast here in Singapore, where I'm finding myself building a "portfolio" of credit cards to match my needs - many places offer resonable discounts for those paying by specific types or specific banks credit cards, and am yet to encounter a surcharge (other than taxis and airline bookings )

 

[oz_mark]

I hotels don't, car hire don't. )

I am not sure when they were introduced, but Accor have a surcharge, Rydges have a surcharge, Hertz have a surcharge. It is spreading like a cancer!

(and Mantra surcharge on Visa/Mastercard but not on Amex)

 

[dajop]

I am not sure when they were introduced, but Accor have a surcharge, Rydges have a surcharge, Hertz have a surcharge. It is spreading like a cancer!

Wow this is a load of bollocks. Hotels and car hire in particular benefit tremendously from having credit cards, it has become an integral part of their business model - preauthorisations, backcharging for unpaid fees. Maybe companies should start insisting on accounts again, personal travellers paying by cash or commissionable TA vouchers only - ie no direct distribution. Watch them follow up forgetten minibar transactions instead of simply backcharging the credit card.

 

[lovetravellingoz]

Why is it only airlines/the travel industry charging credit card fees? If I use credit at the supermarket, it costs nothing more.

It is many others too.

ie

JB HiFi

Some service stations

Some utilities

Was at the Marriot recently and it was the first Hotel I had stayed at that charged 1.5% extra.

 

[bushtuckerman]

Tiger's business model, which seems to be built on coughpy ground service, teaser promotions, component pricing and a call-centre-from-hell ultimately dooms their Australian operations. Many people fly with then once, and swear never again.

Recently Tiger cancelled a flight that I booked in November 2008, and I sought a refund. After numerous STD calls (Tiger doesn't have a 1800 or 1300 line) and line drop-outs, my refund was agreed. It will take 6-10 weeks to be credited.

As for credit card surcharges, I can understand merchants seeking to off-set Amex's high rates, but Visa and M/card fees are more reasonable. I have said "no" to Visa and M/card surcharges on numerous occasions with mixed success.

Credit card transactions provide many advantages for merchants such as less cash in the till, transfer of fraud-risk to the cc provider, and easier record-keeping. Merchant fees are a cost of doing business and should be built into the cost of goods sold. The customer already pays an annual cc fee (maybe), and shouldn't have to double-pay.

Now, don't get me started on Canberra's architecture...

Cheers
Bush

 

[Dave Noble]

Credit card transactions provide many advantages for merchants such as less cash in the till, transfer of fraud-risk to the cc provider, and easier record-keeping. Merchant fees are a cost of doing business and should be built into the cost of goods sold. The customer already pays an annual cc fee (maybe), and shouldn't have to double-pay.

Why should those who do not use credit cards, subsidise those that do? If you decide that it is beneficial to pay a bank for a card which will allow you to spend money and also incur a higher cost to the merchant, then should be prepared to pay for it.

Perhaps they should just drop merchant fees and collect the fees from the card holders and that would avoid CC surcharges

Dave

 

[dajop]

Why should those who do not use credit cards, subsidise those that do? If you decide that it is beneficial to pay a bank for a card which will allow you to spend money and also incur a higher cost to the merchant, then should be prepared to pay for it.

In theory yes, other forms of transactions also come with a cost. Just because a credit card provider is charging a merchant 1.5% for credit card transactions, doesn't mean that the transactions is costing 1.5% more than other types of transactions? (IIRC cash transactions - other than those that fall outside the tax system - cost about 0.8% or something like that). Why should people paying by EFTPOS (which I think is the cheapest form of transaction) subsidise those paying cash?

And why should people making small transactions (eg on a $100 airfare, QF charge a 7% surcharge, excluding GST) subsidise those making larger transactions?

 

[Dave Noble]

Why should people paying by EFTPOS (which I think is the cheapest form of transaction) subsidise those paying cash?

Cost of paying in cash to a business account is probably on par with the eftpos cost

And why should people making small transactions (eg on a $100 airfare, QF charge a 7% surcharge, excluding GST) subsidise those making larger transactions?

That's a different issue entirely to whether those using credit cards should be subsidised by those that don't.

Dave

 

[dajop]

Cost of paying in cash to a business account is probably on par with the eftpos cost

Direct cost maybe. But there are indirect costs as well to cash (eg security, handling etc). I cannot find the reference but I'm pretty sure the overall cost of the different transactions (total not just the bank costs) went Credit Card >> Cash > Debit card > EFTPOS.

And also important to not forget in some instances it's a zero risk way for store to provide credit to (some) customers, and potentially creates sales that wouldn't otherwise be there. Of course those who could pay cash but instead pay by CC, and pay the CC bills off each month - and in the process rack up a heap of points are the big benefeciaries

 

[whereishome]

As for credit card surcharges, I can understand merchants seeking to off-set Amex's high rates, but Visa and M/card fees are more reasonable. I have said "no" to Visa and M/card surcharges on numerous occasions with mixed success.

My company what I work for (a not-insignificant sized company with operations in various other countries) oncharges the merchant fees on all cards. I have to calculate them when someone doesn't want to pay by bank transfer - AMEX 3.2%. Mastercard/Visa 2.2%.

And credit card transactions have more human capital involved than just a simple bank xfer, due to them having to be processed on another system to the accounting system (usually the bank), verified, cross-referenced and then actually credited in your accounting system manually.

Unacceptable about your flight booked in 2008 being cancelled and the run around on your refund, but if you're trying to cut everything to the line and run an LCC then on-charging for every option (including meals, IFE & credit-card surcharges).

Heck, my TA charges a credit card surcharge!

 

[Saab34]

I see that they have cut out the Visa Debit Card $0 fee, so if you dont have a Mastercard Debit card (not many), you need to slap a $12 fee ontop.

Surely the ACCC can look into this, its just stupid.

 

[Aussie_flyer]

why on earth would the ACCC look into this?? Qantas themselves charge you for using a credit card, Singapore airlines now charge AU$25 for flights ex Australia for credit card fees.... the list goes on and on. at least tiger is offering an option where you can avoid the fee.

 

[Dave Noble]

why on earth would the ACCC look into this?? Qantas themselves charge you for using a credit card, Singapore airlines now charge AU$25 for flights ex Australia for credit card fees.... the list goes on and on. at least tiger is offering an option where you can avoid the fee.

Qantas also offers an option to avoid the fee

Dave

 

[Aussie_flyer]

Qantas also offers an option to avoid the fee

Dave

hi dave,

yep, they do, and I take advantage of both Qantas bpay and Tiger's debit card facilities. I don't see how it is an ACCC issue though

 

[Dave Noble]

hi dave,

yep, they do, and I take advantage of both Qantas bpay and Tiger's debit card facilities. I don't see how it is an ACCC issue though

Indeed. I agree with you there; just that it seemed to suggest that QF didn't offer such an option

Dave

 

[oz_mark]

I see that they have cut out the Visa Debit Card $0 fee, so if you dont have a Mastercard Debit card (not many), you need to slap a $12 fee ontop.

Surely the ACCC can look into this, its just stupid.

As far as the ACCC is concerned, as long as they comply with the TPC (which essentially in this case is ensuring fees are properly disclosed) there is not much to investigate

 

[odysseus]

I see that they have cut out the Visa Debit Card $0 fee, so if you dont have a Mastercard Debit card (not many), you need to slap a $12 fee ontop.

Yar, it's a bit of a farce.

Others just need to get wind of it, and we'll have 0 charge offers if you visit the solitary Australian office in person where it's only open one day a fortnight from 10 a.m. to 11 a.m. and pay in certified bank cheque. All other payment "options" will have a surcharge... for your convenience. But, hey, it is possible to pay without a surcharge so they can get away with it.

 

[brucelaidlaw]

Tiger's specials today say:

"Tiger RAW Domestic Fares - fully inclusive, one-way, hand baggage only, payment by Australian-issued Mastercard Debit card only"

I have a Visa debit card. Looks like I can't fly! :evil:

 

[Dave Noble]

Tiger's specials today say:

"Tiger RAW Domestic Fares - fully inclusive, one-way, hand baggage only, payment by Australian-issued Mastercard Debit card only"

I have a Visa debit card. Looks like I can't fly! :evil:

Yes you cant, you just have to pay the $6 fee

Terms & Conditions
This "Tiger Raw" fare is the lowest available fare from Tiger Airways Australia and is fully inclusive of all taxes and charges. The "Tiger Raw" fare does not incur payment of the $6 convenience fee associated with credit card purchases per passenger, per flight sector. Payment by Visa or Mastercard credit card or international debit card is permissable subject to payment of this fee.

Dave