Small Business ACCC Excessive Surcharge Ban

overkillxx on 02/09/2018 - 11:49
Last edited 02/09/2018 - 14:04 by 1 other user

Hey Guys,

As many know, new laws came into play in September last year banning excessive surcharges on purchases. Details as per link

Yesterday I went shopping with the Missus. She decided to get a facial treatment done. Suffice to say on there price list they had 2 prices for basically every service they offered. One price was marked as "Full Price" whilst the other was "Cash Price". The cash price was on average a good 5 dollars cheaper for basically every service they offered (Give or take). I queried as to whether the difference in price was the surcharge for using a card. There exact response was "No this is not a surcharge, it is a discount we offer for using cash". My partner elected to pay by cash, as it was 5 dollars cheaper, as would likely be the case for most people who walk through the door.

Obviously it's obvious that a lot of the cash money won't be appearing on their books, hence why the are doing this.

I'm putting this out there to get others thoughts on this. Is this actually illegal or is this business using a loophole around the ACCC ruling?

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Comments

  • altomic on 02/09/2018 - 11:53
    +16

    Tax avoidance

    • overkillxx on 02/09/2018 - 11:59

      Yes. For sure it is.. But is it illegal to do what they are doing with the new ACCC Excessive surcharge ban?. thats the query… They've been flaunting these prices even on there website..

      • ronnknee on 02/09/2018 - 12:20

        Worth reporting to ACCC.

        • chumlee on 02/09/2018 - 16:17

          Better to report to ATO to ensure they are declaring the cash payments

  • bobbified on 02/09/2018 - 13:55
    +6

    Life is all about options

    It's simple. If someone complains, they'll just take away the cheaper price and everyone will pay the higher price.

  • Ocker on 02/09/2018 - 15:28
    +1

    I can beat your encounter - went out for dinner during the week and the discount for cash was a whopping 20%. This is not a question of an unfair credit card surcharge as the base (listed) price has no surcharge to pay by card. Tax avoidance, most certainly as there can be no other rational explanation.

    • echelon6 on 03/09/2018 - 10:16
      +1

      at least they're sharing the tax avoidance savings with you. Would you rather they didn't?

      • HighAndDry on 04/09/2018 - 10:43

        Yup. I'd be happy to pay cash if it meant saving 20%.

  • whooah1979 on 02/09/2018 - 15:31
    +3

    "No this is not a surcharge, it is a discount we offer for using cash"

    That sounds reasonable. Pay less, pay cash.

  • Zedsdeadbabyzedsdead on 02/09/2018 - 16:01

    Discounts for cash have been going on for decades….

  • JimmyF on 02/09/2018 - 18:27

    Is this actually illegal or is this business using a loophole around the ACCC ruling?

    Illegal? No.

    Loophole for surcharges, maybe but a legal one.

    The main reason they do it, is 'cash' disappears off the books.

    So if you had only been offered only a 2% discount for cash, you wouldn't bother. They have to up the discount to get people to pay 'cash' and/or go to the ATM to get cash out.

    Cash to them means no GST to pay ($9 saving per $100 of cash), and no tax (so 30% saving) and if paying the workers 'cash', then no super, work cover and many other things paid.

    So offering $5 discount, means a MUCH larger saving to them than to you.

    • noyesmaybeok on 02/09/2018 - 18:34
      +2

      Which is illegal. That's the irony - yes you might save a bit, but people screwing the govt over means others need to pay more tax to make up for the shortfall, so in the overall scheme it's no good

      • whooah1979 on 02/09/2018 - 18:46
        +4

        Which is illegal

        Paying cash for goods and services isn’t an offence. Offering discounts for payments by cash isn’t an offence.

      • JimmyF on 02/09/2018 - 19:40
        +3

        Which is illegal.

        customers paying cash and/or the store offering a discount isn't illegal at all.

        That's the irony - yes you might save a bit, but people screwing the govt over means others need to pay more tax to make up for the shortfall, so in the overall scheme it's no good

        Its not the customer screwing over the govt. Thats the ATO job to enforce. For all we know, they could be declaring every cash dollar on the books.

        If this is the case, then NOTHING illegal has happened.

        • bobwokeup on 03/09/2018 - 10:41

          It is illegal as there is no other reason to provide such a discount in price.

        • whooah1979 on 03/09/2018 - 10:45
          +1

          @billybob1978:

          What offence are you referring to?

        • bobwokeup on 03/09/2018 - 10:46

          @whooah1979: providing a massive discount for paying cash is to avoid paying tax. Unless you can think of another reason?

        • bobwokeup on 03/09/2018 - 11:05

          @whooah1979: that is this post where the OP also suggested it is to avoid paying tax. Did you mean to link to another post?

        • bobwokeup on 03/09/2018 - 11:35

          @whooah1979: oh haha I’m not saying the act of paying for goods in cash is illegal but offering a massive discount for cash is illegal as they are doing that to avoid paying tax. I can’t think of another reason to provide a massive discount which would make it legal?

        • JimmyF on 03/09/2018 - 12:03

          @billybob1978:

          It is illegal as there is no other reason to provide such a discount in price.

          Sorry, point out what law they are breaking by offering a discount for cash?

          The goodguys had this as their slogan for years and years too BTW, are you saying it was illegal?

          https://www.giftcardsonsale.com.au/wp-content/uploads/2010/0…

          They only dropped it about 2 years ago as everyone was moving away from cash for big purchases.

          Offering a discount for cash isn't illegal by either the business or the consumer.

          It is illegal to NOT declare the income, and that can happen regardless of the payment method, but much harder with digital payments.

        • HighAndDry on 04/09/2018 - 10:44

          @billybob1978: They don't need to give a reason. What world do you live in that you have to justify all your actions to the government?

  • peterpeterpumpkin on 02/09/2018 - 18:54
    +3

    I'll play devil's advocate.

    A lot of their clients are homeless people that save up money collecting drink containers. They kept offering them discounts because they knew their difficult financial circumstances but the homeless people always declined out of pride. Taking advantage of the fact their homeless clients lacked electronic funds, they decided to introduce $5 discounts for cash across the board, enforcing the discount. They don't offer receipts because of their passion for the environment.

    This is probably the same thing going on with all those tradies offering cash discounts. Because of my unkempt appearance they must have thought I was a squatter doing up the place.

    • donga100 on 02/09/2018 - 20:12
      +4

      I think this is definitely what is happening. Those homeless people coming in for a facial but too proud to take the $5 discount otherwise.

      • Zedsdeadbabyzedsdead on 02/09/2018 - 21:57

        I refuse to give them homeless people nowadays. They might buy shelter and food:)

    • chumlee on 03/09/2018 - 08:15

      You posted on the wrong thread

    • bobwokeup on 03/09/2018 - 10:43

      Thanks for the laugh it made my day ;)

  • overkillxx on 02/09/2018 - 20:26
    +1

    Lol.. Say basically in a nutshell the new law around excess surcharges being banned can easily be worked around for a small business by simply stating the price difference of cash vs card is merely a discount and absolutely nothing to do with a "surcharge"..

    • peterpeterpumpkin on 02/09/2018 - 21:28

      Nah. Maybe before September 2017. Or if the cheapest facial was like $1000, making the surcharge less than the 'cost of acceptance' (https://www.accc.gov.au/system/files/1193_Payment%20surcharg…).

      I'm no money engineer, but I suppose if you formed a Society for the Continuation of Australian Money (SCAM) you could offer a cash-back reward for its devout members, who swear allegiance to paper money.

  • Peace Horse on 02/09/2018 - 21:50

    well think about it, if you complain the prices are going to go up not down.

    • rompastompa on 03/09/2018 - 13:47

      well think about it, if you complain the prices are going to go up not down.

      What, like our taxes?

      • Peace Horse on 03/09/2018 - 13:54

        So far example, dodgy tax avoiding store offers a product for $55 or $50 with "Cash Discount"

        Customer complains, store raises price to $55 for everyone to avoid ACCC complaint.

        With both prices being equal for CC/EFTPOS and Cash, some customers might opt to use CC/EFTPOS in which case Tax Revenue is increased.

        Some customers might still prefer cash, in which case the store takes in more profit.

        Store might even increase prices by more than $5 to compensate that they are now not avoiding tax and want to recover that shortfall.

        If you really care strongly about tax revenue, best to report them to the ATO.

  • Samsungnote10 on 02/09/2018 - 21:54
    +2

    That has got nothing to do with surcharges.

    They're most likely trying to avoid tax bla bla etc etc no doubt.

    So If your service costs $100 and your surcharge 1%, and you say I'm going to offer cash price of $95,
    Got Nothing to do with how much surcharge for credit card

    Unrelated, and you've missed the point

  • coco1458 on 02/09/2018 - 22:11

    What is a fraud is having no eftpos machine but then having a private ATM in the venue so they collect fees from each transaction and cash off the books

    • lolz112 on 03/09/2018 - 07:55
      +2

      You need to check your definition of fraud.

      • coco1458 on 03/09/2018 - 12:45

        Sorry definitely the wrong wording used there. My bad

    • JimmyF on 03/09/2018 - 12:04

      Umm thats not fraud, yeah its crap, but not fraud

    • HighAndDry on 04/09/2018 - 10:46

      That makes perfect sense. Businesses have to pay to have an EFTPOS machine.

  • cloudy on 02/09/2018 - 22:29

    well, it seems like.
    Cash RRP - discount
    EFPTOS RRP
    CC RRP

    So i dont think theres anything wrong.

    It's certainly not
    Cash RRP
    EFPTOS RRP
    CC RRP+Fee

    which is what ACCC is targetting.

  • Speckled Jim on 03/09/2018 - 08:23
    +1

    Obviously it's obvious

    Slam-dunk?
    Report them and see what doesn't happen.

    Last I checked, cash was still legal tender in Australia.

  • petitejam on 03/09/2018 - 08:36

    Went to a restaurant recently and the minimum eftpos amount was $40. Now I get when its something like $15, but $40 seems excessive surely especially when the dishes are around the $12 mark. It's always asian restaurants that do this. Can I pay the surcharge on card? No. Not accepted. Wonder what books are being cooked.

  • mogy1808 on 03/09/2018 - 08:42
    +1

    Only wrong if they are not declaring this cash income.

  • Lateralnw on 03/09/2018 - 09:07
    -2

    Are we missing a vital point here? Why are the banks charging a fee when it's our money. If they don't like the electronic costs of implementing and maintaining their systems, then simple, go back to cash transactions.
    Once upon a time you got paid in cash,no banks,no bank fees and no banks needed.
    Forced us all to be paid via a bank account while promising no fees. Once they had us in, then they started applying the screws (not the gaol/jail type!) and fees popped up for everything. But of course we have short memories (Midnight Oil)
    Re this business not even a drop in the bucket. Are you all blind and deaf to the current Royal Commission on banks and Super?
    Seems our morals are really fk'ed up these days.
    Drops mic walks off stage.

    • whooah1979 on 03/09/2018 - 09:29

      Once upon a time you got paid in cash,no banks,no bank fees and no banks needed.

      That was a very long time ago. Banks have been around for more than 600 years.

      • Lateralnw on 12/09/2018 - 08:57

        Being paid in cash stopped in about the 1980. 600 years of banks in Australia is a long shot.
        OP was talking about Oz. Really off topic.

    • peterpeterpumpkin on 03/09/2018 - 09:58

      I agree that we just shouldn't get complacent so that they hook us into a cash-free system and then take advantage (hello negative interest rates). But with the exception of the "big banks", things have actually gotten better over the past year. There are more fee-free accounts and PayID finally allows us to send electronic funds instantly and free-of-charge. We'll see how these developments play out over the next few years. The main benefits of traditional debit/credit facilities would be fraud protection and international support (whether the fee amounts are justified is another matter). Australian banks are probably fearful of technology companies taking over like in China (Alipay and WeChat), but even tech companies are known to change fees and other conditions at the drop of a hat.

      • Lateralnw on 12/09/2018 - 09:17

        Agree the banks have improved but they still have control of your pay before you do.
        And because they do they seemed to think they could get away with charging fees. So they make money from your money going in and when you take it out. Pretty good deal or racket they have got going. They pass on their electronic costs to the consumer and retail stores.
        Transaction fees for buying a meal. Check your receipt next time. The ACCC stepped in but they really should have told them to remove all fees. They can take it out of the profits they make every year on the people who put their money in.
        Eventually there will be no cash no atms no need to print money save the government heaps, lots of lost jobs and no one will have any control over their money.
        This could be great if you really trust others to control your money. I like the option of using cash which is what the OP started on. Tax avoidance in his question is just a hypothetical unless you can review their books.

    • Samsungnote10 on 03/09/2018 - 13:01
      -1

      If it's your money you should be putting all your money in your pillow

      Having these credit card facilities costs money as well as the minuscule reward points they give out too

      • Lateralnw on 12/09/2018 - 09:22
        +1

        Either you work for a bank or you don't have a clue. I'm tipping its the latter.

  • lovepub on 03/09/2018 - 09:27
    +1

    The Good Guys always says Pay less Pay Cash.

    I guess they are trying to avoid Tax as well for cash transactions.

    Small business trying to make more profit by cash transactions so they don't record them in books. Simple as that.

    Almost every Restaurant does that. It's immoral but humans are greedy hence we go the extra length. (At least for the majority of us, and you can count me in too)

    Unless you are doing really well in your business, otherwise the tax will pretty much kill your business .

  • suntap on 03/09/2018 - 09:29

    Have you considered it might have to be for the reason of cash flow? Cash flow is the life blood of a small business as credit card payments can take 24 - 48 hours to show up in their bank account. As well, they may need to have cash available for staff to pay for deliveries, as you do not give your company credit card or cheque book to staff members. Cash doen't incur surcharge fees, bank transaction fees and doesn't come with clearance times before you can access it. Many businesses with very healthy sales figures can still end up in liquidation purely because of cash flow reasons. and even though many people are going cashless these days, in business, cash is king - For many, many reasons and tax avoidance is only one reason that could be at the bottom of the list.

  • curtturtle on 03/09/2018 - 09:35
    +1

    This is just crap. There should be no surcharge for purchases regardless of payment. As the retailer, you accept MC, Visa or Amex to make it easier for your customer to give you money. Like paying for electricity to run the lights so customers can see in your store, electronic payment is a buying assistance.
    At our work, we no longer take cash, due to some thefts many years ago. So we obviously don't charge people to pay via CC.

    • JimmyF on 03/09/2018 - 12:07
      -3

      This is just crap. There should be no surcharge for purchases

      Says the person not paying the surcharge.

      Why don't you just accept and pay a surcharge if YOU choose to make life easier for yourself and pay for items by card instead of cash? Oh as thats 'unfair' is it?

      At our work, we no longer take cash, due to some thefts many years ago. So we obviously don't charge people to pay via CC.

      That was your works choice and as everyone is a pack of theifs working their its in the businesses best interest to not have cash around then ;)

    • Samsungnote10 on 03/09/2018 - 13:03

      Although i hate surcharges and never pay them.

      So should a car dealer selling a $50k car be forced to accept the 2% surcharge for amex which is $1000

      • tomsco on 04/09/2018 - 09:46

        They can just say they don't take card payments except for the initial deposit.

        • Samsungnote10 on 04/09/2018 - 09:57

          Op is saying that there should be no fees on credit card payments because everyone uses it

  • lookinforstuff on 03/09/2018 - 15:36

    No one can point the finger at a discount claiming with any proof that it is to avoid Tax unless you are prepared to perform an Audit on their books.

    Calling the ACCC or ATO is just rediculous when you have no idea at all for the reasons behind the discount.

    There is nothing illegal in offering a discount for any particular form of legal payment.

    We stopped burning people suspected of being Witches long ago.

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