‘Doesn’t make sense’: Aussies paying $4 billion a year in surcharges

An Aussie politician has hit out at a “loophole” that they say is milking cash out of everyday Aussies struggling through a cost-of-living crisis.

Australians continue to face surcharges when using debit or credit cards at the checkout, thanks to a “loophole” in the current system.

Despite the fact Australian Consumer Law and the Competition and Consumer Act regulates certain practices when it comes to paying at the till, there is no legal requirement for businesses to offer a fee-free payment option, even if they don’t accept cash.

This costs Australians about $4 billion annually, for essentially paying to access their own money. Surcharges can be found everywhere, whether it be at a pub, supermarket or even your rental payments.

It has led to Bennelong MP Jerome Laxale calling for “urgent reform” to address this issue, particularly in light of its growing financial impact on regular Aussies doing it tough in the middle of a cost-of-living crisis.

Mr Laxale stressed the need for businesses to offer a digital payment option without surcharges to protect consumers.

“The system that’s been in place for 20 years doesn’t make sense in 2024,” he said per The Nightly.

He further pressed the issue in August when he questioned Commonwealth Bank CEO Matt Comyn at a House of Representatives economics committee meeting.

Mr Laxale pointed out the discrepancy of a $5 cup of coffee costing $5.08 when paid for by card.

Mr Comyn responded by explaining that the additional costs for digital payments are not the same as for cash transactions, which already have embedded costs.

Aussies are being charged $4 billion a year in surcharges.

This explanation, however, does little to prevent cafes or businesses from charging customers additional fees for card payments.

Under current consumer law, businesses are only required to be transparent about the payment types they accept and display the full cost upfront, including any surcharges.

According to the Australian Competition and Consumer Commission (ACCC), businesses must not charge more than the cost of the payment type and must justify their surcharges. If a business is card-only, it must display the full price, including any fees.

“Under the Australian Consumer Law all businesses must display clear and accurate prices and must not mislead consumers about their prices,” the spokesperson said.

“They added that businesses must also be “clear and upfront about any higher surcharge amounts for other payment methods.”

A restaurant came under fire this week for a similar case - a mandatory 3 per cent gratuity fee.

When a picture was shared on Reddit on Wednesday of Italian restaurant Grana’s menu that stated “3 per cent gratuity added to all bills”, social media users expressed outrage and refusal to support a culture of mandatory tipping down under.

Surcharges can be found everywhere, whether it be at a pub, supermarket or even your rental payments.

“If 3 per cent applies to all orders, just raise prices by 3 per cent. Considering how much this sh** pisses Aussies off, I’m surprised they would do this over such a small amount,” one top comment read.

“I dunno why restaurants do this when all it does is irritate customers. Like they could just bump their food and beverage prices up a few per cent and not talk about it and everything would be fine,” agreed another.

“I am sick of these American style ‘gratuity’ and all hidden charges are creeping up in Australian food scene. Soon diners will be the one expected to pay for the wait staffs livelihood, grrrrr,” said a third.

However, the Sydney-based hospitality group House Made Hospitality, the owner of Grana and several other restaurants, insisted the gratuity was optional when contacted by news.com.au.

“The optional three per cent surcharge at Grana, communicated at multiple stages during the booking process and again verbally when the bill is presented, is designed to reward our team for their dedication and hard work,” a spokeswoman said.

“It also serves to incentivise exceptional service and support increased tenure within our industry.”

Originally published as ‘Doesn’t make sense’: Aussies paying $4 billion a year in surcharges