Lot of businesses are adopting cashless payment during this pandemic.
Is it still legal for them to have surcharges on card payments (Not American Express).
I had to pay for a meal that costs $12. The cash was ready in my hand. The server told me they don’t accept cash payments anymore, and that I had to pay with card. Which will incur a 1% surcharge.
Why do I have to be forced to pay the surcharge if no other payment options are given to the customer?
Yeah they shouldn't be allowed to do that…. Not sure what you can do though.
Companies can charge processing fees based on the card vendor in combination with the card type. So Mastercard has one fee, Visa has another, AMEX yet another. They cannot, however, charge more than THEY get charged for the processing of the transaction.
@trankillity: The price shown has to reflect what you can actually pay for the product though. If it isn't possible to pay $12 they shouldn't be able to write $12 on the sign.
@Quantumcat: True, but that's NOT the fact you were disputing :)
Prices definitely should have been final price if not accepting cash, however businesses CAN charge a surcharge on Debit if the provider of the EFT is charging a surcharge.
@trankillity: Well what I was thinking was that if OP could have avoided the fee using a debit card instead of a credit card then the retailer wasn't doing anything wrong. But it sounds like they couldn't.
@trankillity: No, that's not the point. By law, the business must provide at least one method of payment that is not surcharged.
ACCC:
"Can a business apply a surcharge to all available means of card payment? Yes. However, if you do this while not accepting cash, the price displayed should include the minimum surcharge payable."
EFTPOS should not have any surcharge. You can’t use contactless though.
Oh really. There’s a difference between EFTPOS contactless and insert?
Eg at aldi , tap with visa debit will be surcharged. Insert is none.
That just depends on the routing of the transaction. Some acquiring banks do contactless through eftpos by default: https://www.tyro.com/about-tyro/media/tyro-confirms-cheaper-…
At Aldi, when you insert the card you have to explicitly select eftpos (SAV or CHQ). You could select other processors, and be charged the fee accordingly
Yes, depending on how the terminal/contract is set up.
Some places will process contactless visa/mc debit through the EFTPOS system instead of the visa/mc system which normally occurs a flat fee of 25-50 cents depending on your contract and service provider. Some places will treat that as part of operating costs and not surcharge for it. We only see surcharging for visa/mc transactions because a percentage of a large transaction results in some high fees whereas EFTPOS transactions (savings or cheque options) are charged at a flat relatively inexpensive fee.
Inserting a debit card will usually either default to the visa or mastercard system or allow you to choose between visa/mc debit, cheque, and savings (the last two being processed through the EFTPOS system). I've heard some merchant providers charge differently based on method used (apple or google pay/contactless/chip/swipe) but haven't actually seen it.
Another kicker for the merchant to cover is which type of visa/mc credit card is used. The premium ones (usually marketed as platinum or black) have higher fees.
I beleive that if you use EFTPOS contactactless, it goes through Visa/MC debit, which is different than inserting and entering the pin.
If you have an eftpos only card you can do eftpos contactless but if your card also has visa / mastercard as well as eftpos contactless will usually be done through them instead of eftpos because banks make more money that way
Calm down buddy. I think you're missing the point.
Is it still legal for them to have surcharges on card payments?
https://www.accc.gov.au/business/pricing-surcharging/payment…
Why do I have to be forced to pay the surcharge if no other payment options are given to the customer?
I don't like this myself, but while we are in a pandemic business can still do that.
Aldi is the only store I've seen in years that charges a surcharge for cards. I wish they would just add 0.5% to the price of their products tbh.
They don't charge fees if using eftpos. But they only do contactless through Visa (IIRC) so for no surcharge you have to insert or swipe
No, it's Visa or Mastercard. Contactless is a pretty dodgy in the sense that it just "chooses" an account for you rather than giving you the option.
I can't even remember the pin on my card. I never use it. I use Apple Pay.
To me it’s fair game as long as the fee is within lines of what the bank is charging. For the sake of 1% it’s not worth getting an angry customer who goes on a ganders against my business. (Happened to a friend).
They should at a minimum allow Eftpos payments at no cost. Considering the cost to the business is also lower on Eftpos.
That depends on the business contract with the bank as well, I get charged 12 cents for an eftpos transaction regardless of total and .45% for visa/MC
From a legal website
There is no law however against a provider of good and services setting terms upon which they will accept payment before the contract for the supply of goods or services. For example, signs before you order a coffee saying they will not accept cash or on a parking meter indicating they will not accept coins of a low denomination.
But the way you have worded your post might indicate that they did not have such a sign(s). If so that is wrong.
They didn’t have a sign at the temporary store front. Customers are not able to enter the shop. So they might have it stuck up a sign in the original register 10metres down the back.
And she didn’t mentioned surcharges until I asked if there were any.
I thought that all business' had to offer a fee free method of payment?
That’s what I thought.
No. They just can't charge excessive over what it actually costs them, so they cannot profit from it.
But obviously if the surcharge to the business is 1.3273% then if they were to charge you 1.5% fair enough.
Three things:
Will you be more comfortable if the restaurant doesn't charge you the surcharge BUT the menu displayed price is $12.12 instead of $12.00?
What more likely to happen is they raise the menu price to $12.50 - $13.00 if they want to get rid of the surcharge.
What if I have purchased the meal before and I know it’s $12.00 and just have enough cash for it. And the menu displayed $12.12?
Why do I have to think of hypothetical scenarios to make myself feel better?
IF they did not have a sign, give them the cash and say that you have no alternate payment method
.
I did.
On the other end of the scale, I find it funny where businesses are still cash only and no card functions. My local barber was at last check still cash only, doubt the ATO is getting their full cut.
its also just people don't want /never learn to deal with new technology.
I'm aware of big businesses who are still operating on DOS/ XP networks
The current covid situation with Service NSW ap being required by everyone ignores the fact that its too complicated for some, also not everyone has a smart phone
Ask them to invoice you and that you'll pay by bank transfer.
Cash only Restaurants tried to help you guys out for ages ;)
I was always under the belief that cash must always be accepted in settlement of a debt?
So if you already ate the meal, tried to pay cash but they refused to accept cash as payment - this would be illegal.
Whereas if you ordered takeaway and hadn’t received the order into your hands over the counter, and refused to accept cash as payment - this is within their right to refuse.
You get it back at tax time anyway because you are not subsidising
I don't know why people get hung up on pricing structure. The price is $12.12. If you don't think that's a fair price for what you bought, go elsewhere next time. Do you care how they got to the other $12 of the price? There may be other hidden surcharges in there too. Who cares?
Some people may be more price sensitive than others. If a meal had a price tag of $12 in the menu, it is expected that it would cost $12, not $12.12.
That's not pricing structure, it's unclear and unadvertised surcharges, dogy practice and a lack of transparency. It doesn't matter the amount imo.
Not related to this purchase but I bought a Bed recently and they flat refused to waive surcharge or any kind of discount to compensate, despite previous purchases. So I went home and used Afterpay which has a much higher percentage for them with no surcharge. I would really have rathered they just levied a little more to cover it since most ppl pay on card, rather then making me pay a non advertised price or stuff around with bank transfer.
So you wasted your time, and the business's additional expenses, to make a point??
How much did that cost you in time and fuel for that extra trip?
I don't know many people that would buy a bed without looking at it first, so no time or trip was wasted. If the Business don't want to encourage afterpay, they should reconsider their Business model in relation to surcharges.
This is gonna force drug dealers to form a union and rally against cashless purchases!!!
1.00% is within normal cost (business can pass on cost of transaction to customer). Not fussed with this. More annoyed with the ATM message “this transaction will incur $2.00. Do you want to continue?”.
It is annoying after you have inserted/tapped card, put your PIN in, and then get told of the fee. But nowadays it is pretty obvious which machines do this.
I don't think OP is complaining about the 1% cost of business. But more about if something is advertised at a price and you have to pay more than that price; in Australia thats' not allowed.
The RBA states there must be at least one surcharge free payment. This normally is insert a debit card and press eftpos.
Advertise you accept cash, going to make lots of money. How many infections have been traced back to cash?
It costs us 33c to accept either an EFTPOS card or a VISA/Mastercard debit card. That's bugger-all for $200 on groceries at ALDI, but that's nearly 8% of your local barista's coffee expenses assuming a $4.50 latte.
Credit cards get charged a straight percentage (1 to 2.3% depending on the card). But that's a tiny amount of our total card transactions; most are now debit cards via PayWave/phone.
Spare a thought for the small businesses getting railed by the multinationals here.
Maybe small businesses should start accepting crypto instead of being whiney and taking it up the ass from multinationals.
If I could pay suppliers in crypto? Sure!
…wait, how many of my customers own crypto? And of those that do, which ones are stupid enough to buy things with it??
HODL FTW
That's your own fault. Why on earth did you sign up to pay 33c per transaction if you're a cafe with a low median order value?
Even the most expensive plan at CBA is a flat 1.8% (8c on that latte)
Conveniently neglecting the additional monthly fee that they charge each business…
Comparing to Tyro that we currently use, we'd actually have to pay more each month in costs
https://www.commbank.com.au/business/merchant-services/eftpo…
There is no monthly fee for the first terminal. $150/month for up to $12k of sales (= 1.25%); thereafter 1.5%.
No additional fees except chargebacks and stationery.
Unlike large businesses, small businesses can’t negotiate the contract terms and we are rather forced to choose a plan from what banks have available.
Increase all the prices by 33 cents then.
I don't care if my coffee is $4.50 or $5, I want it regardless. I do care if it says one price on the menu, but when I'm paying, you ask me to pay a surcharge.
Not sure if everyone thinks along the same lines though. Went to a cafe the other day and a small cappuccino was $4.50 (no extra shots or alternative milks). I don't see myself going back when pretty much every other cafe on the Central Coast does it for $4 or less. Agreed about the surcharge though, especially if cash isn't an option.
Leave the food to go cold upon their counter, and walk out.
They should have informed you prior to making order.
Just walk out.
Exactly what I thought, I'd walk straight out
Is this a chain or a small business?
And are you in NSW?
A friend of mine went to Nick Scali and was told not accepting cash. He just walked out.
No they just accept jobkeeper
Are there any reasons why businesses don't accept PayID, Beemit, PayPal?
Paypal works great for online invoices, but not seen any good POS integrations for it.
Same with PayID/Osko; front counter staff don't have banking access to verify the money has been paid into the account, nor is there any API method to accept it as a payment in the POS.
If there was broader adoption of dynamic QR codes for customer charging (like crypto) then it would be very easy as a fee-free instant payment method, but needs banks to do the work.
People have to understand the fees are against all small businesses when it comes to bank/transaction provider charges.
Banks charge 1-1.5% or more
PayPal charges a MINIMUM of 2.7%
Other boutique providers like stripe square etc all charge anywhere from 2-3%
Buy Now Pay Later charge anywhere from 6-10% (yes it provides an additional service, but in the long run it costs businesses more)
These charges are on TURNOVER, meaning literally, for any small business, each year at minimum 2.5-10% of their turnover goes to paying transaction fees.
GST is 10%
Rent is normally 10-15% of turnover
Wages is 15-20% of turnover at minimum.
So yeah, transactions fees can cost businesses on average of 5%, which is nearly half or 1 third of their rent or 1/3 or 1/4 of wages.
Most of the time, businesses won't know how much a transaction will cost them, whether you're using a standard or platinum/premium credit card - the cost to the business can be a difference of 1-2%
Imagine every customer who gives you $100, says, look, I'm only going to pay 95%. How would you feel?
This is why cash is still best.
Even the guys trading crypto are getting wrought by the exchanges with all the hidden fees and rates.
I usually tell them I pay cash to avoid the surcharge. Usually they remove the surcharge or give me another option that is surcharge free.
The most interesting example i had, I paid cash but the shop didn't have change. So they wanted me to pay via card. I said no issue but they wanted to charge me the surcharge. I said that is not fair. A bit of back and forth, they remove the surcharge at the end.
I've declined to complete a transaction due to this as they didn't advertise it at the point of sale, it was after the made my meal so I just walked out and went next door. Why? Because fuk em.
It takes more time and money (ironically) to process physical currency. For a business that is not dodging tax by under declaring, it makes less sense to accept cash and pass on all transaction cost to the the customer.
But yes, dick move not to tell you ahead of time.
I am not sure why small businesses won’t accept cash. I’d dare say that they are doing it wrong.. As a consumer, I always pay in cash to my local cafe/restaurants/pubs/butchers to show my “support”… what they do with it is their business and I support them no matter how they handle their cash.
correct me if im wrong here but from my understanding the eftpos terminals are paid by transaction, so the business is really borrowing the ability to have an eftpos terminal in their store.
surely this would have been discussed when the contract was signed that the payments work and by doing the above the store owner has passed the costs to the consumer.
i have been in this position before and stated that cash is legal tender and if they choose to not acept it then its on them.
i have also been in situations with the so called minimum transaction of $10, where by if i dont hit the $10 i get charged 50c, i have pointed that its not how it works with me walking away.
the ACCC should make it clear on how it works so there is transperancy across all shops.
Need to report these places to the ACCC.
Indeed I have done so in the past and have since avoided them.
Calling out an app called me&u which some restaurants use for their ordering system. Went to a place that only used that, ordered and then was slapped with a flat rate "venue surcharge" as well as a card surcharge at payment. Nowhere does it tell you beforehand that these would be put on top your order total.
It's extremely dodgy and the ACCC should crack down on it.
me&u sucks but there's certainly some novelty in having a beer delivered
Report it to ombudsman
Just don't buy from that retailer again? Simples.
There's fortunately, a very clear answer straight from the horses mouth:
https://www.accc.gov.au/consumers/prices-surcharges-receipts…
Applying a surcharge to all types of card payment
Can a business apply a surcharge to all available types of card payment? Yes. However, if the business does this while not accepting cash, the prices it displays for its goods or services should include the minimum surcharge payable.
That's not a clear answer: it says "should" rather than "must"
All shops I go to give discount for cash
As someone who doesnt carry cash ever im all for it.
Im all for a cashless society it would stop all the tradies, businesses etc avoiding tax with 'cash' payments
1% transaction fee honestly doesn't bother me if you tap an go under 100 with HSBC you get 2% cash back so it isnt so bad
I agree with you.
However, it's not that simple.
Cash, means the person has no choice but to spend it, it moves faster through the economy than credit card transactions - that in turn spurn interest charges with people spending beyond their means - PNPL will further compound this. You cannot re-invest cash, you cannot get interest on cash. Many people are less inclined to spend the money in their bank account. This increases the price of houses as people don't want to keep money in the bank either due to low interest. Just a few examples.
Most businesses only make a net profit of about 10-15% on the dollar, meaning for every $100 they take in, only 10% of that ends up going to the owner.
I'm sure the ATO is aware, and I'm sure they're also aware, remove the cash, and many businesses will just go broke or just shut down as it's not worth it. It's better to keep these guys employed on their own terms, rather than have them go on the dole etc and forcing the government to find them jobs. You want to get the man to fish, rather than feed him. I now pay more tax than I earned when I first started out on my full time job after uni - but I don't feel a vendetta against trades who accept cash?
Sometimes it's good to look beyond your perspective.
Either way though, you essentially make it more expensive for yourself, as businesses will eventually pass on the cost to the consumer, and it won't be a 1% increase, it will be a 5-10% purely for the sake of rounding.
Discretionary goods prices are literally going to go up 10-30% up to 2023 - surcharge fees are going to be the least of everyones worries.
Also - why are people complaining about 1%, when most of the food businesses are pretty much bankrupt. Have you not seen what has been going on?
In Western Sydney, there are businesses that only accept cash like the burger joints.
haha
Pokies
For all that complains about the 1% charge, why don't you get the HSBC card which gives you 2% rebate for pay pass? You'll be 1% in front. Actually slightly more than 1%.
Not if you go to a Fish n Chip shop near me that is strictly cash only .
Another Asian bakery where I sometimes go is the same .
Even during the pandemic they have refused to change their ways .
You don't need to be a rocket scientist to know the reason .
It was 1% on all cards including debit.