Popular Melbourne nightclub Brown Alley criticised over alleged five per cent surcharge on all transactions

A trendy Melbourne nightclub has been criticised over claims of “ridiculous” surcharges at the popular establishment.

Nightclub criticised over ‘ridiculous’ sign.

A Melbourne CBD nightclub has been chastised over its “ridiculous” EFTPOS surcharge rate which more than doubles most industry standards.

An anonymous Victorian reveller claims to have referred the Brown Alley Nightclub to the Australian Competition & Consumer Commission (ACCC) this week over the venue allegedly demanding high surcharges.

On Monday, a Reddit user posted an image of a sign informing patrons of the unusually high additional fee, stating: “Found out that Brown Alley nightclub now charges a ridiculous 5 per cent surcharge … for all payments on card. Wow.”

Brown Alley Nightclub in Melbourne has been criticised over this sign. Picture: Reddit

The person claimed they expressed discontent with the surcharge to the club’s staff, who they said “don’t care”.

The poster shared by Reddit user reads: “Dear customers please note our EFTPOS machines have a 5 per cent surcharge on all transactions. Thanks for your understanding.”

The user made the claim they referred matter to the consumer watchdog, reporting the added charge was unusually high.

The ACCC did not confirm whether or not it was investigating the business when contacted, but told news.com.au that traders must be able to prove surcharges are imposed legally.

“Businesses can charge a surcharge for paying by card, but under the Competition and Consumer Act, the surcharge must not be more than what it costs the business to use that payment type,” a spokesperson said.

“If a business charges a card payment surcharge, it must be able to prove the costs it is based on, and follow the rules about displaying the surcharge.”

Brown Alley was sent a series of questions by news.com.au and has not responded.

The popular 24-hour nightclub has hosted some of the most renowned DJs, bands, and electronic acts from around the world.

Under Australian law, businesses cannot charge a payment surcharge that exceeds the cost of processing that payment method, as determined by the Reserve Bank of Australia and enforced by the ACCC.

It is situated within the grounds of the Colonial Hotel in Melbourne’s CBD, and often hosts house, techno, breaks, electro, progressive, indie, and alternative rock performances.

Under Australian law, businesses cannot charge a payment surcharge that exceeds the cost of processing that payment method, as determined by the Reserve Bank of Australia and enforced by the ACCC.

Visa and MasterCard credit cards typically cost between 1-1.5 per cent, Visa and MasterCard debit cards will cost between 0.5-1 per cent, and American Express credit cards will cost between 2-3 per cent, as per RBA cost estimates.

A Victorian reveller shared an image of a sign stating the surcharge on Reddit. Picture: Facebook

In February this year, it was reported Australians who exclusively use digital payment methods pay at least $140 per person annually in surcharges and fees alone.

Cash advocates however suspect that it is a conservative figure.

Cash Welcome’s Jason Bryce told news.com.au at the time, citing ABS household expenditure data, that $140 from the average Australian is likely an “understatement”.

Mr Bryce said Australians spend an average of $1425 per week on goods and services, excluding housing ($279) and education ($44), resulting in a weekly expenditure of $1102.

After adjusting for inflation, the amount is $1376.

Applying a typical surcharge of 1.5 per cent to that figure equals $20.64 per week or $1073 annually if all transactions are made through digital or card payments.

Originally published as Popular Melbourne nightclub Brown Alley criticised over alleged five per cent surcharge on all transactions