In an era where cashless transactions are becoming the norm, consumers who have embraced the convenience of cashless payments find themselves at the mercy of hidden fees and surcharges that can add a significant burden to their everyday purchases. But there’s good news on the horizon, as the Australian Competition and Consumer Commission (ACCC) steps in.
This move comes in response to a series of reports from consumers across the nation who have been excessively overcharged for card purchases.
To clamp down on the ‘excessive’ surcharge scourge that’s been costing consumers, the ACCC has put businesses on notice, warning that fines of up to $50,000 could be imposed for those attempting to circumvent card surcharge laws.
The issue of card payment surcharge fees, which reached a ‘record high’ of $1.3 billion, has been a thorn in the side of consumers, particularly those who prefer to go cashless.
The ACCC’s crackdown is not just a punitive measure but also an educational campaign to ensure businesses understand and comply with surcharging rules.
ACCC chair Gina Cass-Gottlieb has emphasised the importance of this initiative, stating, ‘Our work will focus on increasing business compliance with the excessive card payment surcharging prohibition and improving pricing practices to ensure all add-on costs are appropriately disclosed.’
With $2.1 million allocated last year for this crackdown, the ACCC is serious about protecting consumers from being unfairly drained of their hard-earned money.
The rules are clear: businesses can only charge customers what it actually costs them to process card payments. For example, if a business incurs a 1 per cent fee to accept card payments, they can only pass on a 1 per cent surcharge to the customer.
Typical surcharge amounts vary depending on the card type, with EFTPOS usually being less than 0.5 per cent, Visa and Mastercard debit between 0.5 per cent and 1 per cent, and Visa and Mastercard credit between 1 per cent and 1.5 per cent.
However, some businesses have been caught adding surcharges as high as 3, 4, or even 5 per cent, far exceeding their actual costs. This practice not only misleads consumers but also unfairly inflates the cost of goods and services.
‘These were repetitive instances … it looked like the coffee was five dollars, but then there’s an additional 50 cents, $5.50, it matters,’ Cass-Gottlieb explained.
For Belinda Ellis, a café owner in Brisbane, they have been upfront about their 1.4 per cent surcharge for card payments. Ellis said this is the lowest rate they are charged when customers pay using cards.
Aside from advocating for transparency and encouraging customers to pay with cash to avoid these fees, Ellis educates them about the costs associated with card payments and offers them the choice to pay with cash.
‘Create awareness, not through shaming them for using a card, but by explaining how much money you spend for that service and if you were to absolve it into your prices, a cup of coffee would end up costing an arm and a leg.’
The ACCC’s campaign is a reminder that businesses must include the minimum surcharge payable in the displayed price if there’s no way for a consumer to pay without a surcharge, such as when a business doesn’t accept cash. This ensures that consumers are not caught off guard by additional fees at the point of sale.
Meanwhile, with the government signalling a potential ban on all debit surcharges from the beginning of next year, businesses may need to absorb these costs or adjust their pricing. This could lead to a significant shift in how businesses operate and how consumers choose to pay for goods and services.
For our readers, it’s essential to be aware of these surcharges and to check receipts and statements for any unexpected fees. If you believe you’ve been unfairly surcharged, you can report it to the ACCC, although they cannot settle individual disputes. The ACCC can, however, take action against businesses that breach surcharge laws, including issuing fines and naming and shaming offenders.
We’d love to hear from you. What do you think about the ACCC’s crackdown? Share your experiences and thoughts with the YourLifeChoices community in the comments below.
Also read: Card payment fees hit $1.3B: What it means for consumers and businesses
Sorry, but if I can’t pay cash for my general spending or food, then I certainly won’t use a card! This way, I can keep a very keen eye on these expenses, and then I can’t overspend on them, as if I don’t have any cash left at the end of the fortnight, then I can see where I’ve spent my money and adjust what I do spend.
I certainly don’t want a 8-10 page bank statement to reconcile each month. 2-3 is just right for me.
Just think, if you want to apply for a loan, or credit card, then the bank can see exactly where you spend your money, and ‘could’ assess you as a high credit risk, and decline your application.