A ban on excessive charges

Small business operators are advised to review costs to customers paying with plastic following new legislation banning excessive charges.

Small business operators are advised to review costs to customers paying with plastic following new legislation banning excessive charges.

Central Victorian small business operators are advised to review costs to customers paying with plastic following new legislation banning excessive charges.

Dr Michael Schaper, deputy chair of the Australian Competition and Consumer Commission, said the excessive surcharge law was in response to customer complaints of paying exorbitant amounts to use Etfpos (debit and prepaid), Mastercard (credit, debit and pre-paid), Visa (credit, debit and pre-paid) and American Express cards issued by Australian banks.

Dr Schaper said the ACCC was granted new powers to enforce the ban and could issue fines of up to $1,358,910 but was more interested in raising awareness than prosecution.

Dr Schaper said businesses could now surcharge only what it actually cost them.

"The surcharge ban has applied to big business since September last year and was recently extended to all businesses," he said.

"Businesses can only pass on to customers what it costs them to process a payment such as bank fees and terminal costs. For example, if your cost of acceptance for Visa credit is one per cent you can only surcharge one per cent on Visa credit card payments onto your customers."

He said businesses with no surcharge absorbed the costs in their pricing structure leaving customers to vote with their feet.

Businesses charging a $10 minimum purchase using plastic are not affected by the legislation.

"They are within their rights to have a price limit on purchases. Some business owners decide the fees paid by them to process payments is not worth the transaction and customers can choose where to use their card," Dr Schaper said.

"All transactions incur fees for a business, even cash."

Bean Cafe and Deli Cafe owner Sharyn Maltby said she found applying a surcharge fee had resulted in too many customer complaints and she had instead chosen to absorb the costs in her pricing structure.

"Staff were upset having to deal with customers complaints, rude behaviour and claims it was an illegal practice."

She said transaction fees alone cost a minimum of $120 per month, plus associated costs providing an electronic payment system. Further costs were incurred in dealing with suppliers and catering clients.

Council of Small Business Australia CEO Peter Strong said there were extra costs the customers didn't see.

"There is always a cost somewhere. You don't get something for nothing," he said.

"However there is no justification for overcharging and this legislation ensures customers are protected."

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