Inflated surcharges

CHOICE finds credit card surcharges are money for jam for some retailers.
Learn more

02.Government inquiry

CHOICE's findings on credit card surcharges have caught the attention of the Australian government, which has promised to investigate whether retailers are engaging in profiteering from additional surcharges. CHOICE believes some retailers have been adding excessive surcharges to credit card transactions. Beyond covering costs, some are using surcharges to generate an extra revenue stream.

A CHOICE survey has identified airlines, telcos, travel agents, restaurants, utilities, taxis (Cabcharge) and petrol stations as among the worst offenders. The top five companies that respondents recalled surcharging were Telstra, Aldi, Qantas, Virgin Airlines and Caltex.


Sign up to our free

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.


Our findings

NSW Fair Trading recently approached CHOICE for a joint research project on credit card surcharges. We conducted two surveys: an online survey of 1435 consumers and a diary survey of 140 members who kept a record of their credit card activity, tracking the incidence of surcharges over a two-week period. We found:

  • about 88% of online respondents reported paying a credit card surcharge in the past year
  • more than 50% paid a surcharge between one and five times
  • 22% had paid surcharges more than 10 times in the previous 12 months.

Our survey also found that surcharges are usually applied as a percentage of the transaction amount – the highest are more than 10%. However, there are some cases of flat fees, such as those imposed by airlines – the highest we found was $25 per person per booking, charged by Qantas on international bookings. About 64% of respondents had seen surcharges applied by airlines. When booking online, these fees are hard to avoid.

Government response

Following our report, the Australian government says it will investigate excessive surcharging by retailers. The inquiry will also seek to determine whether surcharges are being adequately disclosed at point of sale.

Deputy Leader of the Australian Greens party, Christine Milne, put forward the motion in the senate in a bid to protect consumers from rip off credit card surcharges. “The Greens are very pleased to have secured the Government's agreement to investigate this issue as a first step towards stopping the profiteering,” said Senator Milne.

CHOICE welcomes this development designed to increase consumer protection.

What you can do to avoid a surcharge

Here are some tips for getting the best value:

  • Read our article Cheque, savings or credit, which spells out the different payment systems and how to use them to avoid surcharges
  • Use EFTPOS and other debit cards — There’s often no surcharge and fees for the merchant are lower than for credit cards.
  • Report non-disclosure — Businesses must ensure that consumers know a fee will apply, and the amount, before the transaction occurs. If this doesn’t happen, complain to the Australian Securities and Investment Commission (ASIC).
  • Compare surcharges — If you can’t avoid the surcharge, choose the card with the lower rate – many merchants charge different amounts for different credit cards.

For more information see the full report on credit card surcharging.

Become a surcharge sleuth

Become a surcharge sleuth by helping us uncover some of the shonkiest credit card surcharges. Leave a comment here, telling us where and when you were hit with the surcharge, how much you were charged and whether the surcharge was disclosed to you before the purchase. (It may help to have your receipt handy.)

Your say - Choice voice

Make a Comment

Members – Sign in on the top right to contribute to comments