Surcharges for using cash or cards

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I saw in the media recently that Telstra Shops are now charging a surcharge when customers pay with cash. Weird!

Then I went to my local IGA store yesterday and actually kept the cash register docket for once and looked at it when I went home and discovered that they had added a 0.99% surcharge for using EFT to pay for the groceries.

This surcharge business is getting out of hand. I will be writing to my local federal MP to protest but he is a Liberal so I suspect that that is a waste of time but I don’t think that the matter of arbitrary surcharges will get much of an airing wherever it should matter.

I am feeling a bit ripped off by these inconsistent charges. Whether we use cash or EFT, it seems that we are going to pay some sort of an inflationary penalty.


To be more correct, Telstra charges a fee if you choose the offline method of receiving and paying your bill.
Want your bill by post? Then cop the fee. Want to pay in person at a post office or Telstra shop? Then cop the fee.
Nothing to do with card surcharges. It is a fee for service.

IGA is a franchise. Up to the owner of the place as to whether they implement card payment surcharges, and for what types. My local IGA has no surcharges for anything other than credit card transactions. But I rarely use credit transactions except for online payments and purchases. And that is more for the protection that credit card transactions can provide in the event of something going wrong, and the chargeback ability.


Then Telstra’s fee penalises people who are not internet-literate such as the very elderly. That seems to be very discriminatory to me.

This reminds me of when Qantas added a fuel surcharge to their airfares some years ago. It seemed to take a long time for that fuel surcharge to be rescinded.

I can understand a fee on credit card transactions because the merchant incurs a significant vendor fee when they have to accept payment through that method, especially for “gold” cards and some particular brands of high vendor fee credit cards.

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No, Telstra has exemptions from the fee for those on various support types, like aged pension.

I used to get a fee free transaction when I withdrew money from my CBA account at the local post office agency (no ATM or bank here). Then CBA started noting a charge for the service which I hadn’t had before, but the first 3 are free on the Pensioner Account.

At a local business (start-up by 3 friends) they advertised a card surcharge. I paid in cash, but the young salesperson got the calculator out and added the % to the total. I had to explain that cash wasn’t card. It was real money, not a debit card or gift card. It seems few people pay cash now.

How about self funded retirees?

Not everyone is on an old wrinks’ pension.

I live in a suburban area where my IGA offers the following ways for me to save (and no CC surcharge)…

  1. I can buy IGA gift cards from Metcash, which are periodically discounted by 10% (and no CC/EFT surcharge) as an IGA Rewards member and use them
  2. Oldies like me can get a 5% discount on non-reduced/special products on a Tuesday or Thursday
  3. ‘IGA rewards’ at my local store offers a 1% cashback for all purchases
  4. If I spend more than $30 in one transaction, I can present my fuel docket and receive a 4c/L discount.

Some stores seem to be better at seeking return custom…


You are indeed very lucky to have an IGA store that accepts the Metcash cards plus the oldies’ benefits. No such luck in my case, however.

That 1% surcharge on using debit cards at my IGA is so annoying that I will probably shop more at Woolies and Coles, for which I can at least use 4% discounted eGift cards from places like the auto clubs - eg RACQ.

Regrettably, though, that particular IGA store, where I have shopped off and on since I was ten years old (am a septuagenarian nowadays), has the most delicious products made on site in their delicatessen. Too good to ignore at times. :wink:

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I am aware of what it costs to handle cash in a business.
I think a card surcharge is immoral, because it is much cheaper for the business to handle compared to cash. I think we are being conned about the cost of credit cards.


Being a small business owner, I would have to agree.

I also believe cost of payment should be factored into the price of services and products. Separating it out like that which can currently allowed is akin to ‘drip pricing’.

If consumers knew that cash processing by businesses is costly and absorbed by the business… yet card merchant fees which in many cases is cheaper and more convenient for businesses is passed on, they wouldn’t be happy and feel duped.

Having recently visited Melbourne, card surcharges is rampant amongst businesses. Some display surcharges at registers, others have loosely worded signs that surcharges will be applied and amounts shown on transactions or not at all. EFTPOS surcharges the same as credit cards…doesn’t make for a enjoyable customer experience.


Others may like to correct the following or add their experiences. How was it before card payments were common (looking to when Bankcard came into being)?

There were store issued cards (EG Myer, Grace Brothers). The airlines such as TAA had a card system for charging to an account. Many stores accepted cheques and some would run an account and send the bill in the mail. One could send a cheque or settle cash at the accounts window. For deliveries one could COD, however I think some charged and some did not for this option?

I don’t recollect an added cost for the alternate payment services.


I was at a restaurant towards the end of last year before I stopped carrying cash and our bill was quite expensive and there was a high credit card surcharge of 1.9% so I decided to pay with $150 in cash to avoid the surcharge. It appeared that I was the first person to use cash there in ages as they didn’t have any money to give me change and the waiter had to get the owner to come and make the change from his own wallet.

How was that more convenient and cost effective for them than taking a credit card payment without a surcharge?

1.9% must have been for Amex cards. Very few businesses would charge that for Visa or MC credit payments, and very few would charge anything at all for Eftpos card payment.

I have only ever found one single business that added a surcharge for Eftpos.

Up around Eltham that was once the case but has been changing quickly. Lots of shops are starting to add a fixed surcharge rather than a percentage to anything but cash. It seemingly reflects roughly 1.5% of their typical sale so low value sales are hit more and the fewer high value sales less. Those wonderful souls at the so-called regulators are as usual enjoying what seems to be a perpetual high tea ceremony so cannot (will not) get out and about to review how businesses are thumbing their noses at surcharge laws.

Inconsistency suggests consumers are mostly being taken advantage of where a surcharge is imposed.
The local chemist mentioned previously adds 1% whether Amex or Visa or ….
The local butcher does not accept Amex. The surcharge for Visa and other common CC’s is 1.65%, and 0.65% if direct debit. For cash there is always change.

Other businesses appear to have decided which path to follow.
Our two local Co-ops, the servo, Woolies up the road or Bunnings etc much further away add no surcharge for any type of card payment, Amex included.
A proposition is Amex needs to compete head to head with the other cards, and may be cutting its client transaction fees to stay in business.

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That would fly in the face of their history. They offer a range of cards anchored in that their cardholders are generally more affluent and spent more money, and therefore are more valuable to businesses and thus worth higher percentage takes from each sale. In general shops that take Amex are or at least pretend to be more ‘upscale’ from the similar neighbours.

They also sell prestige that Visa and MC cannot come close to even with their ‘Black’ premium cards.

What value is prestige? Check the Centurion card.

The ABC recently had an article about the potential for a cashless society now cheques are being phased out. It points out the cost of cash Cash could be almost gone in Australia in a decade — but like cheques, who’ll miss it? - ABC News

The ACCC also has a guide on the ban on excessive surcharges. I didnt know MC and Visa Debit had a lower cost than MC and Visa Credit until i read this Card surcharges | ACCC

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If one is purchasing a first class around the world airline ticket - no argument.

If one is paying for this months meds at the local Terry White and $7.30 per script - one must wonder.

I’ve a perception the rewards points no longer go as far as they used to. YMMV :wink:

An alternate view point is the relative cost to a business of payments made by any card are less significant than we consumers are made to hear. IE Most business are happy to make the sale rather than loose one whether 0.5%, 1.0%, or 1.5% is passed on to the provider.

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Businesses with bank merchant fees, possibly yes, however many businesses also use providers other than banks. Banks are cheaper for high turnover businesses, but more expensive for smaller businesses.

1.9% is around the standard or flat rate merchant fee for all presented cards (EFTPOS, V, MC, Amex etc). It is likely surcharge of around 1.9% with those businesses using non-bank providers. Our recent trip to Melbourne indicates non-bank providers are very common

The restaurant we went to during the week had a blanket 1.9% on all cards, so it is spreading, not just on Amex.

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