Surcharges for using cash or cards

Shopping
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We were at an eatery today and went to pay at the counter. The staff member just presented the payment terminal to us showing the total bill which included a surcharge. That shows they were expecting an electronic payment (not cash) and included the same surcharge no matter what payment card was used. There were no signs anywhere, even on the terminal showing there was a surcharge.

We also used to frequent a restaurant that only accepted cards (without a surcharge), but they never had a sing showing the payment methods accepted, which used to catch a couple of patrons out when they went to pay.

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62

There will be. Sometimes in small print on a menu. But the business must say in some way. And if a surcharge for all cards, then pay by cash. If they don’t want to deal in cash, then demand the surcharge removed.

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There was nothing shown anywhere. It was a takeaway with seating. I looked carefully whilst awaiting our food.

On another note, when out to dinner at a restaurant Thursday night before last, the restaurant displayed there was a 1.9% surcharge on the menus and on the payment terminal so I adjusted my 10% tip accordingly to take the surcharge into account. I was surprised that no surcharge had been applied to my credit card when I checked the transaction. If I had known that I would have tipped 10%. I think that was a first where I hadn’t been charged the advertised surcharge.

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I find it increasingly common that there is no posting anywhere excepting the interactive screen while paying. Rather than a percent they show ‘A surcharge may be Applied’ and if one proceeds in any manner it is taken as acceptance. I can only assume it might meet the test for ‘reasonable cost recovery’ because of the prevalence, yet it does not sit well.

It seems as with much of our regulation (term taken lightly) the amount of a surcharge does not necessarily need to be posted excepting in certain circumstances. It looks like the litmus test on the business is that it is cost recovery not a profit centre unto itself if and when challenged.

The summarised requirement is

  • Businesses can charge a surcharge for paying by card, but the surcharge must not be more than what it costs the business to use that payment type.
  • If a business charges a payment surcharge, it must be able to prove the costs it is based on.
  • If there is no way for a consumer to pay without paying a surcharge, the business must include the surcharge in the displayed price.

and the exceptions where it is supposed to be posted are in examples

As with most things regulated it takes a formal complaint after the fact for any followup.

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65

Ah, but was your card use a credit payment, or a debit payment? So when you checked was it on your bank account statement, or on your monthly credit card statement?

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1.9% surcharge is a merchant fee for some non-bank point of sale platforms such as SquareUp
and applies to any card whether it is EFTPOS, MasterCard/Visa Debit or accepted credit cards.

Some points of sale platforms, allow automatic application of surcharges whilst some are manual such a pushing a ‘surcharge’ button when payment method is known. You might have been lucky that it was a manual system and it wasn’t applied at the point of sale/payment.

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67

It is worth contemplating this topic in context of https://choice.community/t/apparitions-of-a-cashless-society-and-an-online-connected-life

It seems that businesses are receiving the vast majority of payments electronically, with cash transactions gradually approaching zero. On that basis, surcharges are largely just an uplift to published prices, and should be displayed on every advertised price. They are a business input cost.

They could just as easily charge the price with a discount of n.n% for cash, since cash is now the exception, rather than the rule. It would be more honest.

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68

Naturally, we think & it was in the past, best to pay with cash. However, l think you’ll find the reason their charging this, surcharge, is due to you receiving a piece of paper, obviously your, now due bill with Telstra.
As, the world as a whole, (businesses) are/have been enticing everyone to be more environmentally friendly & not receive paper billing accounts & opt, to receiving them on-line, via Telstra App, for example.

Paying via eftpos systems incurs fees, due to the Retailer/Vendor, purchasing the required digital payment machines, we utilise, within shops, when using our eftpos cards or credit cards. I think lt would be fair to say, the majority of businesses charge for this convenience, to the younger generation(s), as we head to, not a quite cashless society, but close.

It is difficult to not only change the natural, learnt, encouraged & rewarded behaviour of paying cash in our country that has been occurring, since it’s inception of trading of goods. I am 53yo & it took me over a decade to TRUST, NOT ONLY IN MY ABILITY OF HOW TO EVEN E-MAIL, LET ALONE PUT MY CARD NUMBERS INTO ELECTRONIC DEVICE.

I agree with you, that, these businesses etc don’t consider nor appreciate, the position, the elders in our community, especially, face, when it comes to the knowing how to utilise, ? do they even have a digital device? I feel, businesses, like Telstra etc who have an App on the phone & ANY customer is still paying their account in store with a paper invoice, should ask if said person has a device & if so & SUCH COMPANIES, SHOULD TAKE NOTE, AS GREAT CUSTOMER SERVICE, but also, stops person incurring surcharge, thus, better for environment.

Offer to assist these Customers & show them how to download the Telstra App, Set up an Account, guide them through it, hence, Customer, can now pay their bill on-line (end to end encryption) but advice & already shown App, so can decide on own VPN & pay their account with no extra surcharge. Showing this kindness & patience, should just BE, but it’s not, l’m sorry & this is what l would encourage you to do, to avoid this charge. Ask Telstra Customer Service Staff to show you. Then you may also be encouraged to, (not go crazy & be able to be like a Millennial) but confident to seek out a service within your community, cheaper to Seniors, as for Seniors, over 50/55/60 yo to learn as much or as little as they want, to utilise Computer/Digital systems as part of their lives. PLEASE NOTE: THEIR ARE INDIVIDUALS WHO ARE COMPUTER/DIGITALLY LITERATE THAT CARE & UNDERSTAND THE DIFFICULTIES FACED BY SENIORS IN ANY & ALL COMMUNITIES

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Just wondering if anyone is experiencing being told there is now a surcharge for using cash? On a few occasions, I’ve bought a coffee, handed over the cost (say $4) and then told its actually $4.10 because of a cash surcharge - but no sign displayed regarding that. As far as I am aware (and according to ACCC), businesses must accept at least one form of payment that does not incur a surcharge. So 
 who’s correct? The businesses starting to do this or the ACCC?

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70

I merged your topic into this existing one.

That is legal so long as they post the surcharge or post the lowest inclusive price one can pay. A related discussion is whether a cash discount is the same as a card surcharge with both having a similar financial outcome.

For the following references the ACCC and RBA seem to have short sightedly presupposed there would never be a surcharge placed on cash because they reference cards not cash as having surcharges. Note the ACCC and RBA pages are about cards not cash and in a world of law there is a difference - one that should be corrected to include all forms of payment in surcharge regulations.

As with most things our laws are reactionary addressing what is in governments face. Hence card surcharges were in their face a few years ago not the broad context of payment surcharges. This while we are headed toward a cashless society where there is ample opportunity to ‘spread the wealth’ to multiple levels of payment services and systems, making cash an outlier in multiple ways.

To your point, the ACCC does not actively police and focuses on education leading to compliance, not penalties. There is generally little or no down side for any business to do what they want because the most that will usually happen is they receive a letter of how to properly post their surcharge. The RBA is the arbiter of how ‘reasonable’ is defined.

This page is somewhat revealing on how the ACCC operates.

The ACCC and most other regulatory bodies take the approach if there is no complaint there is no problem. Governments have also been reluctant to set penalties for deterrence so there is no down side for doing a wrong thing unless it is pervasive, large scale, and egregious.

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71

In a couple of years, it will be uneconomical to use cash in Australia. Armaguard and Prosegur have already had to merge as it wasn’t profitable for both companies to collect and distribute cash between banks and businesses. With cash payments already down to around 10%, soon it won’t be feasible to distribute cash unless a surcharge is imposed to pay for the service.

If the government doesn’t step in, 2026 could be a very interesting year
 Modernising Australia's Payments System | Speeches | RBA

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‘a surcharge is imposed’

Wait for it, following on from surcharges for cards and now cash, a surcharge for every EFT transaction including all forms from Osko, PayID, Pay Anyone, BPay, direct debits, direct deposits, name it, once there is no other choice but to use those methods of payment making costs ‘transparent’ and thus surcharged seems inevitable.

Some of us think those costs should be rolled into business expenses and thus posted prices, others are happy enough that they are transparent and know it is on them to pay. As with surcharges in general, business can usually deduct their costs as expenses but chose to apply surcharges to minimise their posted prices and thus effectively raise their prices by the surcharged amount - without raising their prices.

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73

It’s like being in America where you grab something from the shelf for $3 and go up to pay and end up having to add the tax which isn’t included in the price.

In Australia the quoted shelf price should be the final price we have to pay and should include any surcharges.

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74

Absolutely. And since there can be varying surcharges each price should be displayed in the same font, same point size, in a list.

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75

I think that if was paying for a coffee for $4 and probably that would be coins, and was told that there was a surcharge on top, then the $50 note would come out. Now give me change for that, or accept $4 dollars even.

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76

The ACCC also offers:

‘Price displays | ACCC

IMG_1420
IMG_14201536×1197 318 KB

Assuming a business adds a surcharge or markup for cash. Do dot points 1 & 3 lead one to believe:
the displayed price includes the cash surcharge,
Or
there will be clear signage indicating the surcharge?

Neither of these dot points are specific to card only transactions. The first “must not mislead consumers about their prices”, might the average consumer relate to what is customary practice? It’s not customary (at present) to add a surcharge for cash. Dot point 3 adds an argument the displayed price is all inclusive. Method of payment not mentioned.

Beyond the average consumer to resolve. For 10c on a $4 cup of coffee? Show me where coffee is still only $4. :slightly_smiling_face:

P.S.
My local preferred coffee stop has surrendered to simplicity. All drink items are rounded to multiples of 50c. Cash, card, device or 
. Includes premium card brands.

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77

does not police any of it, evidenced by the rarity of signage around Melbourne and virtually none around Eltham. OTOH most businesses now have payment terminals that post ‘there may be a surcharge, OK’ without showing how much it is.

The reasonable rule is but a joke and we seem the butts of it as seen from business’ side.

s/cynical

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78

For payment method surcharges, displaying isn’t mandatory like that which exist for public holiday or weekend surcharges. For payment surcharges such as credit cards, the ACCC states:

Where there are other ways for a consumer to pay without incurring a surcharge or other fees, businesses should display these charges in a prominent way so that consumers are aware of the additional costs before payment.

I have bolded the word should. It isn’t must. If one looks at public holiday and weekend surcharges, the ACCC states:

However, if they charge such a surcharge, they must include these words on the menu:
A surcharge of [percentage] applies on [day or days].
These words must be at least as prominent as the most prominent price on the menu.

Again my bolding of the word must. It must be done, unlike payment surcharges.

This wording has allowed some business to use merchant payment systems which charge surcharges post payment and the merchant may not know the charge applied to the payment (hence it isn’t displayed). These surcharges aren’t displayed on tax invoices or payment receipts. This has been raised elsewhere in the community as could be seen as a loophole in the current requirements.

Business which charge payment surcharges should display any payment surcharges. They aren’t however compelled to do so, but not doing so may leave a bad taste in the mouth of consumers when they only find out a surcharge has been applied during the payment or after the payment process (such as added to the transaction total when debited from their bank account).

Edit: As mentioned elsewhere, we run our own business and don’t support consumers being charged payment surcharges. Surcharges should be part of the cost of doing business, especially when businesses chose payment options and their merchant payment provider. Passing on costs of surcharges isn’t in the interest of financial efficiency/reducing payment costs in the economy as businesses have no incentive to shop around for cheaper merchant fees (such as least cost routing where merchant fees are about half of some other more traditional options)

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79

That is American culture whereby people needed to know how much tax they paid, and would not tolerate it being rolled into the price to make the tax opaque. A difference between Americans adding tax at the till and our surcharges is that the American taxes are consistent within a locality because they are levied by one (or more) governmental layer. There are places in the US where there is the price +state sales tax+county sales tax+city sales tax+special levy tax. You only know the final amount at the till because everything after the first ‘+’ while documented somewhere is usually not posted in shops.

OTOH our surcharges can vary from merchant to merchant, and them being able to recoup their costs from us is a disincentive for them to spend any effort finding a good deal (for us), and I suspect may be amenable to receive ‘benefits’ to sign up with certain payment processors.

As with many of our laws, codes, and rules by whatever terminology, my observation is many of them are drafted by amateurs and have ‘holes’, or have been drafted as they are purposefully for the government of the day to show us pretty window dressing - but without much substance possibly to placate the business lobbies. Since posted prices have to include GST one might reasonably wonder why they don’t have to include all underlying charges even if it becomes a menu of prices? The previous comments on the ACCC citing must versus should is indicative. Would mandating all inclusive pricing always being shown be red tape, or would it be honesty in pricing such as with the GST?

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80

Another wrinkle to the rort. We hired a boat requiring pre-payment + a $20 security deposit. It was all surcharged at 1.5% as posted so no surprises. They take cash (no surcharge) but that is not the issue.

On returning the boat the $20 was duly refunded but not the surcharge. It would have been worse if the refunded $20 was surcharged by the payment system so one could argue the refund was processed ‘free’. But since the $20 was flagged to be refunded from the beginning some entity in the chain is getting somewhere in the vicinity of $1,500-$3,000 per annum for participating in the motions and it is coming out of customers’ pockets. It isn’t ‘big’ per transaction yet is the way it is and will be (?) so no worries allowed.

A proponent of surcharging might argue processing the refund was coming from someone’s profits. As with some accounting claims they would be calling it a loss rather than a smaller profit.

If one spends $250 per week that is surcharged at 1.5% that $13,000 pa accumulates to $195 p.a. Spread over the year. Not much per transaction but it is roughly a weeks groceries per annum for some. There are costs to go cashless.

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