‘Rort’: Call for end to hidden costs for Aussie consumers

One of Aussies’ biggest bug bears has become “scandalous” as consumers await a major decision by the RBA.

A humble sign in an Australian food court has renewed attention on the extra costs being lumped on consumers by retailers across the country.

The sign at a Melbourne eatery, shared to Reddit, laid out the added fees Aussies have come to expect – card and weekend surcharges – but one might soon be a thing of the past.

The Reserve Bank of Australia (RBA) is expected to soon hand down its recommendations on whether card surcharges should be scrapped after a lengthy review.

Australians used debit or credit cards to pay for 76 per cent of all transactions, the RBA has found, while another 19 per cent were made “online”.

The sign showing a range of surcharges.

Surcharges are added to most car transactions.

That means cash payments amounted to just 13 per cent – an enormous drop from the 70 per cent seen back in 2007, only a few years after the RBA greenlit the use of card surcharges.

The Albanese government last year promised to “crack down” on unfair and excessive card charges and said it was prepared to ban debit card surcharges if the RBA agreed.

Professor Steve Worthington, from Swinburne University of Technology, said the changes should go further to include credit cards as well – saying surcharges were adding to the cost-of-living crunch.

“I mean, it’s a surcharge on the costs of accepting payment,” he said.

”We’re struggling with something which doesn’t have much value, just confuses people and has led to what you should call a bit of rorting, really.”

Prime Minister Anthony Albanese’s government have said they’re prepared to ban debit surcharges. Picture: NewsWire/ David Crosling

Professor Worthington, a payment systems expert, said he had Witten to the RBA calling for it to mandate a simple proposal: “the price that you see, is the price that you pay”.

That would bring Australia into line with Europe and the UK, where card surcharges were banned.

“Payments are one of the ‘costs of doing business’, just as power, water and premises, so why are payment costs not just incorporated into the price of all goods and services, just like all other costs?” he said.

Under RBA guidelines, surcharges should be limited to the “reasonable cost of card acceptance" such as merchant fees.

The fees, introduced in 2003, were designed to discourage people from using credit cards but have since evolved into an almost $1 billion annual cost to Australians.

Major financial institutions, including the Commonwealth Bank, have urged the RBA to scrap debit and credit card surcharges due to issues around transparency and enforcement.

Professor Steve Worthington from the Swinburne University of Technology.

Card payments are far and away the most popular for Aussies.

In a joint statement in October, Prime Minister Anthony Albanese and Treasurer Jim Chalmers said they wanted to lower costs for both businesses and customers.

“The declining use of cash and the rise of electronic payments means that more Australians are getting slugged by surcharges, even when they use their own money,” they said.

Prof Worthington pointed out how wide-ranging surcharges had become for Australian consumers, saying even the Australian Taxation Office was slugging people with card charges.

It was also often unclear for consumers where the money was going, he said.

“This is where this is getting scandalous,” he said.

“People are charging surcharges for things that they don’t really have the reason to charge for.

“And we get very confused, very angry that we’re being surcharged in this way.

“And I think the most simple solution is you say, ‘okay, this is just one of the costs of doing business, accepting payments’. And you have to write that in terms of what you’re offering.”

The Reserve Bank of Australia is reviewing the fees. Picture: NCA NewsWire/Joel Carrett

Reddit users questioned the high cost of weekend and public holiday surcharges – advertised as 10 and 15 per cent, respectively – saying such signs turned them off businesses.

“Don’t shop at any place that has a weekend/holiday surcharge,” one person wrote.

“Just because the business is charging more, doesn’t mean that employees are getting paid properly.”

“I hate this. I’m sure businesses argue that wages are higher on weekends and public holidays. “BUT many businesses are actually busier on weekends anyway, which offsets the additional wage,” another commenter said.

Then there was this contribution: “The pub down the road has a sign for Sunday roast @ $29.99. Thing is it costs 33 bucks because of the Sunday surcharge.”

Professor Worthington said some businesses were “cheeky” with their extra weekend and public holiday charges.

“I ask myself, ‘does this 10% surcharge, all of it, go to the staff who are working?’,” he said.

“And I somehow think that’s not the case.”

Originally published as ‘Rort’: Call for end to hidden costs for Aussie consumers