Surcharge Free campaign aims to save us the $1.6 billion a year we’re slugged on credit cards

THERE’S nothing more frustrating than popping out for a bite to eat, only to be stung with a credit card surcharge. Here’s how to make sure it doesn’t happen.

THERE’S nothing more frustrating than popping out for a bite to eat, or a spot of retail therapy, only to be stung with a credit card surcharge.

And while tough new laws due to come into effect this year will stop the worst offenders — namely, the hotels and airlines that slugs Australians with hundreds of millions of dollars each year — consumer advocates fear that a surcharging free-for-all is around the corner.

The concern is that, once guidelines around “excessive” surcharges are in place, thousands of retailers that have held off from the practice may embrace it as “the new normal”.

But a campaign to safeguard the tap-and-go convenience we hold dear is gathering steam, with a coalition of retailers pledging to remain surcharge free.

The Reserve Bank of Australia’s Payments System Board will this week unveil new standards for credit card surcharges, expected to include a ban on airlines’ practice of whacking on as much as $8.50 to each flight booking.

But businesses will be allowed to impose a surcharge as long as it is not “excessive”, prompting fears that once this standard is set, it will become the norm across the board.

THE NEW NORMAL?

The reforms are hoped to rein in some of the $1.6 billion Australians fork out on surcharges each year.

But, once the murky practice is subject to clear guidelines, there is a concern that it could actually become more widespread.

The man whose three-year campaign put the issue on the national agenda, Queensland businessman Klaus Bartosch, has warned that the new laws may encourage more businesses to impose surcharges.

“There’s been uncertainty around whether or not surcharges are legal,” Mr Bartosch told news.com.au in February, after the new laws were passed.

“Now that uncertainty has gone away and they can have a free for all ... I’m guessing the government feels that competition among businesses will prevent it, but retailers are under pressure. If they can impose a credit card surcharge, they will.”

Consumer advocate Christopher Zinn agreed, saying there was a risk that the new regulations could “give permission to many people who are wavering to think ‘well look, everyone else is surcharging, we’d be in a comparative disadvantage if we didn’t surcharge’ ... Because, while the airlines and the hotels might get knocked off with fixed dollar surcharges, I think there will be a feeling that ‘one per cent is fine, surely the government sanctioned it because it’s not excessive’.

If this happened, he said, consumers could end up being hit with “more surcharging from more places, that arguably might end up costing them more than the savings they might make on airlines, which have to reduce what have been manifestly excessive surcharges.”

SURCHARGE FREE

That’s where the Surcharge Free campaign comes in, with a coalition of small businesses committed to keeping credit card transaction surcharge free — giving them a point of difference by which to distinguish themselves.

“As a consumer, if I saw a little sign outside of two shops that were identical and one said ‘surcharge free’ and one didn’t, then I would probably be more likely to go to the one that was surcharge free,” Mr Zinn said.

He said that retailers needed to know that customers would take their business elsewhere if they began surcharging.

“We need to remind them that there is a comparative advantage in not surcharging,” Mr Zinn said, citing research showing that more than ninety per cent of Australians considered not being surcharged as important to their repeat business, and many saying they would warn friends against going somewhere that surcharged.

Businesses that have already signed up to the Surcharge Free campaign include The Iconic, Platinum Restaurant Group, House, The Beaufort Bar, Germanicos Tailors, Ready Track, Cannings Butchers and Coco Republic.

The campaign is backed by American Express, with supporting trade representative organisations National Retail Association, Hair and Beauty Australia, The Retail Doctor and JCB.

“They’ve just realised in their gut as good old fashioned retailers that actually, you don’t sting people with an unpleasant surcharge at the end, when they’ve come into your store to buy a meal, a pair of shoes or whatever — because actually, they recognise that that is a bit of a downer,” Mr Zinn said.

“And the research underlines that it’s not just a downer, but actually it means that they might not come back again.”

Business owners can sign up, and download point of sale campaign materials, at the Surcharge Free website.

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