Should hospitality axe surcharges?
On 1 September, a ban on excessive credit card surcharges was imposed on large Australian businesses, and now an organisation is calling on the hospitality industry to take it one step further.
Surcharge Free wants hospitality businesses to remove all surcharge fees they impose, arguing the charges are counter-intuitive in an industry that centres around customer service.
Surcharge Free spokesman Christopher Zinn, said “While we’re all for anti-gouging measures, the new legislation doesn’t go far enough. Payment surcharges are not a cost passed on to customers in many other parts of the world, so why should Australians be expected to pay them?
“Surcharging flies in the face of good customer service, which is the lynchpin of any successful restaurant, caf or bar. Increasing competition in the dining industry means business survival is more than ever dependent on repeat business and positive referrals.
“Put yourself in your customer’s shoes. Imagine you have just enjoyed a great night out, great food and wine and exceptional customer service. Then on settling the bill, you get pinged with a surcharge for paying with a card, it’s enough to leave a bitter taste in anyone’s mouth,” said Zinn.
According to the ACCC, the purpose of the ban is to stop businesses from charging payment surcharges that are more than what it costs them to process the payment. A business doesn’t have to impose a payment surcharge, but if it chooses to it can only pass on the costs that it was charged for accepting payment of that payment type.
Processing credit cards payments can cost the business up to one to 1.5 percent for Visa and MasterCard, and between two and three percent for an American Express payment.
A 2015 credit card surcharge report – funded by American Express – found that 93 percent of Australian consumers would like surcharges removed, with more than 90 percent considering not being surcharged important to their repeat business. Twenty-five percent of retail customers will not return to a business if they’re surcharged.
“Australian customers are savvy and will likely respond to new charges with cynicism. Customers couldn’t be clearer – surcharging is an unwelcome sting in the tail of any purchase,” said Zinn.
“September 1 is the perfect time to do your customers a favour and stop passing on a surcharge. We’re calling on businesses of all types to join us in saying ‘no’ and giving customers what they want.”