It is correct to write “surcharge” as you have because while it seems a semantic game the the ACCC does not consider a “cash discount” as equivalent to a “surcharge” on other forms of payment. As @ijarratt posted above
It seems the only resolution to address this seeming anomaly is through the MPs and a government willing to prioritise this against all their other priorities, weigh it up against votes, frame appropriate legislation to remove a differentiation between a “surcharge” paying by A and a “cash discount” paying by B.
However that could be a ‘be careful what you wish for’ as a likely affect in our market, with competition as it is (or isn’t), could be removing the ‘lowest price a business will sell at’ while keeping the ‘standard price’ that might include surcharges, or a ‘standard price that posts surcharges will be added on’.
That all being written, I share your irritation, and especially so with business in COVID time that ‘prefer card payments’ and zing the customer with a surcharge for doing so. And for those that are very cash-friendly I often wonder how they would go with an ATO audit, not suggesting they might under-report their takings.
I am not sure what you are saying here.
Is it that if the bill is, say $50, if you pay by card you will pay that amount, but by cash it is 5% off that?
Sounds very fair to me. A good deal.
Hence my question to @hitspacebar
The mention is a discount for cash, not a surcharge for card. What I assume for now is that the stated price includes the card surcharge, which can be avoided by paying cash.
Very fair for the business to hand back the cost they would have to pay to card providers if a card is used for payment.
Different card payment methods cost the seller different amounts (different calculation methodologies too potentially) - and the same card payment method for the same amount may cost different sellers different amounts.
It may be time to require explicit disclosure of the exact amounts that each payment method costs a seller - and to lock in the surcharge as exactly that amount, not more and not less. (Hence the disclosure by the seller of its own costs would also be a disclosure to the customer.)
The government specifically wants the business to hit you with a surcharge that reflects the business’s costs for that payment method, rather than allowing one payment method to be subsidised by another payment method.
At the same time the government wants you not to pay cash so that you are under financial surveillance.
So there is a conflict between economic efficiency and the surveillance state.
With so many different payment methods there has to be some kind of standard price. This would allow sane comparison between different sellers for the same item. For bricks-and-mortar stores the cash price would seem to be the obvious standard price (at least up to the limit that you can legally pay in cash).
However, as we all know from airline pricing, the standard price must be able to be achieved with some payment method. So for online stores perhaps the standard price needs to be the price for directly crediting their account or if that is unavailable, the lowest price for an available payment method.
Also in COVID time with the increase in online transactions, which in practice can’t be done with cash.
Having just a ‘standard price’ would hide high unequal surcharge amounts until the final amount is presented so a lower standard price with higher surcharges could be more expensive at the till than a higher standard price with lower surcharges.
Yes, maybe no ideal solution. The scenario was that for a bricks-and-mortar store they accept cash, you can pay cash and the cash price is the standard price is the displayed price.
A seller can’t hide a higher surcharge unless it is real - based on what I wrote. A higher surcharge would never be profiteering on the part of the seller.
For smaller businesses, it is likely to be in order of a few percentage points more than the merchant fees. The additional percentage is for time to reconcile accounts with purchase transactions, fees for bank accounts, costs and time to deal with transactions such as disputes/charge backs etc. Some businesses outsource some of these, such as reconciliations/bookkeeping. Some of these can also apply to cash transactions to a lesser extent, and cash transactions include additional ones such as time and costs associated with making deposits.
These are additional costs above set merchant fees incurred by businesses when accepting credit cards. Who pays for them, the customer either through direct or indirect pricing.
Except it doesn’t cost almost 5% to accept any card payment. At my workplace, we don’t charge extra for cards as it is more costly to deal with the cash. People have to count it, check it and bank it safely. With card payments, it is all done for us on the day it is received. I’d like to start offering a discount for card payments.
I suspect the restaurants taking more cash are actually not declaring their full income and are actually saving a lot in unpaid tax.
I agree there is a cost that is in reality a surcharge built into the price, for accepting cash. We as a buyer, don’t see this cost because it isn’t a figure that is displayed and it has been always built in.
As you point out, there is a time cost (and so a money cost) of balancing the till, handling the cash safely (risk of theft, the cost of banking it, the cost of having to get cash to fill the till). In some awards there is an extra payment made to workers who handle cash. All of these things add to the cost of accepting cash as a payment.
The excessive surcharges, to me, seem simply a way that some businesses harness a way to profit themselves beyond the normal cost of conducting a sale and in some cases avoid the scrutiny of the ACCC (small derisive laugh here about the ACCC’s efforts in many things). As mentioned above in posts, it is probably in some cases also a way to disincentivise the use of cards so that cash is preferred and tax obligations hidden. In some businesses, probably a win for the businesses no matter which way the buyers pay for goods/services.
Some (esp small) shops/services in shopping centres have leases based on their turnover. Minimising turnover reduces their rent as well as their taxes. To wit, how many get a receipt/tax invoice when they pay cash?
The barber I attend in a small shopping centre ‘prefers cash’, no receipts mentioned. Use a card and the ‘receipt’ magically appears, but no surcharges – they had them for a while but got lots of pushback and finally dropped them.
I paid cash at the restaurant and there was no receipt. I suspect that with restaurants, profits are low as they have the cost of the food (wastage - as they have to have more than people will order), staff, rent, electricity, delivery companies etc… so not having to pay tax on the little profit they have left probably keeps them in business.
Indeed. But let’s start with the basics: What is the merchant fee incurred by the business being complained about?
There isn’t any disclosure. We don’t know and things might work better if we did.
That’s probably the test of it i.e. distinguish between cash to avoid merchant fee (receipt available) and cash to avoid tax (get pushback asking for a receipt).
You may have to ask for a receipt because a receipt itself has a cost - paper, ink (where applicable), wear and tear on the printer. I often have to ask for a receipt when paying with a card.
When buying goods it makes little sense not getting a receipt because if you have to return the goods and you don’t have a receipt, you may be SOL. That applies whether paying by cash or card but mostly to cash. You want a receipt. Whatever dodgy (if it is) discount might be available for paying cash is not a good discount if the goods are rubbish and you get stuck with them.
For the record, the ACCC says that a business has a right to require “proof of purchase” if you want repair, replacement or refund - and if you pay by cash, proof of purchase is likely to come down to having a receipt.
You were burned by a gym? Funny you say that. My first and biggest problem years ago was a gym. I quit within their terms and conditions and they still billed me for 2 months more even though they were not entitled and they did not surrender the DD.
I applied to NSW Fair Trading and told the gym I will then go to NCAT and Exhibit 1 will be their confirmation of receipt of my email where I quit being a member. All their lies thereafter will not amount to a hill of beans I told them after NCAT sees their confirmation of my email quitting well within the stipulated time frame which meant they could not debit me over and over again.
We never got to FT or NCAT after they repaid me the money, cancelled the DD and when asked, reimbursed me the NCAT fee.
Only by waving big sticks do low rent service providers behave themselves. And by “behaving themselves” I don’t mean they do me any favours, I mean they act reasonably and honeslty.
