Surcharge cash cow milked for too long
RBA must publish true cost consumers are ‘paying to pay’
CHOICE says credit card surcharges are out of control and has recommended a series of reforms aimed at reining in excessive costs.
The consumer watchdog has used its submission to the Reserve Bank’s consultation on card surcharges to say surcharges should only pass on the real costs of transactions, and should not be used as a hidden revenue stream.
“CHOICE believes surcharges must be fair, in line with the genuine costs to the merchant, and clearly displayed,” says CHOICE Head of Campaigns, Matt Levey.
CHOICE recommends that:
• Any surcharges should reflect the direct cost of the transaction, meaning no more cream on top for those excessively surcharging.
• Online retailers should give a clear indication of surcharges at the start of the sale and everywhere the headline price is advertised.
• There is one surcharge per payment – no adding a surcharge to each item.
• Surcharge limits should be enforced by an appropriate agency that provides an avenue for consumers to raise complaints.
• The RBA should collect and publish data on the total dollar amount of surcharges collected by merchants.
“We need a reliable estimate from the RBA of what the public pays in surcharges to show if it’s hundreds of millions or even more. Until then, some business will continue to use surcharges as a way to increase profits,” said Mr Levey.
CHOICE says the rapid growth of online shopping means that there is increasingly no easy alternative to credit card payment.
“It’s the equivalent of waiting in line at a corner store, only to be told at the last minute there’s a special fee for using the checkout. You’re paying for the privilege of paying.
“At the very least, these costs should be transparent from the outset, as well as limited to the true cost of the transaction,” says Mr Levey.
Read more about CHOICE's position on credit card surcharges, including the submission to the RBA enquiry.
• Matt Levey, Head of Campaigns, CHOICE: 0488 214 066
• Ingrid Just, Head of Media, CHOICE: 0430 172 669