Credit card surcharges – when did it become so acceptable to annoy your customers?

Credit card surcharge

Surcharge – probably not what AMEX had in mind when they gave them free wallets

Should the last think a customer remembers about your business leave a bad taste in their mouth?

Qantas surcharge $30 per ticket

I see, the ticket is actually $30 more than advertised! Can I pop round with cash? No.

Should you pretend your prices are cheaper than they are by smacking your users with a large credit card surcharge when they’re about to buy from you?

It seems increasingly popular amongst bad businesses to surprise the customer with increasingly large surcharges – the above cafe has stuck 3% on by surprise (and illegally as it was not mentioned on the menu) and I found the Mansion Hotel in Melbourne charging 4% for AMEX – my current world record.

Qantas, above, charged $30 per ticket for using credit card – a huge hit and a big extra cost on the price of a ticket.

I’ve also found a number of bars adding card fees to bills without disclosing these – lately The Tilbury and Stitch Bar both adding charges to my receipt without saying anything. Both great places but both getting a mention here because it is annoying.

Companies take note, this is what the [soon to be loyal] customer wants to see:

Virgin trains - no charges

Update 18 January: The SMH published an article today about ticketing service fees which says:

The Reserve Bank of Australia estimated in September the average merchant service fee for MasterCard and Visa is 0.81 per cent of the transaction…
‘The practice of incremental disclosure of additional fees and charges – often referred to as drip pricing – is a key focus,” an ACCC spokeswoman said.
Booking, transaction and service delivery fees are ”credit-card surcharges by another name”, Tom Godfrey of Choice says. He says credit-card surcharges should be capped at less than 1 per cent of a transaction.

Update 22 May - Here’s a guide to whether a credit card charge is illegal or not. It seems they often are.

Leaderboards - I’ll update these when I see a new entry

Largest single credit card charge by $

1st – Qantas $30 x 2 = $60 on one transaction

Largest credit card charge by %

Mansion Hotel & Spa Melbourne – 4% on AMEX

 

  • Sergei Veinberg

    See your point.. but AMEX charges their merchants 3% of the amount – an outrageous fee by any standard. If the prices are the same for everyone, then it is just subsidising AMEX users.

  • http://www.goodmoroning.com/ Julian Peterson

    @sergeiveinberg:disqus – I guess but I actually wouldn’t go to some places if I knew they were going to charge extra.

    Too many businesses hide these charges until it is time to pay/check out thereby making their prices look cheaper than they actually are.

    1% for credit cards charged in restaurants but not detailed on the menu is, I believe, illegal. Ditto, 3% charge for AMEX but not detailed upon booking, rather than just at check in, is a variation of contract and not enforceable.

    Either way, there’s an opportunity for businesses who choose not to annoy their customers this way to get ahead.

  • http://www.goodmoroning.com/ Julian Peterson

    I’m just back from 3 weeks in London and France and apart from the flights, I didn’t pay a single credit card surcharge the whole time.