Retailers urged to stop ‘harmful’ surcharges

retail

A collective of retailers, business associations and advocates this week launched Surcharge Free – a national movement urging businesses to end the practice of payment surcharges.  

This follows the commencement, earlier this year, of the Federal Government’s Competition and Consumer Amendment (Payment Surcharges) Act 2016, which bans excessive credit surcharging.

Surcharge Free is spearheaded by consumer advocate Christopher Zinn, who said the ban on excessive payment surcharges doesn’t go far enough.

A negative consumer experience

“Some businesses may perceive this as permission for them to surcharge, as long as they don’t do it excessively, failing to realise the consequences introducing a surcharge will have on their business,” he said.

“Surcharge Free is designed to raise national awareness of the positive impact being surcharge free has on businesses.”

“For as long as I can remember, consumers have been vocal about their negative feelings toward being charged extra simply because of how they’ve decided to pay. Surcharges are not a cost passed on to consumers in many other parts of the world, so why should Australians be expected to pay them?”

“Look at the bigger picture”

Zinn highlighted the need for businesses to focus on the ‘bigger picture’ of customer experience and warned that the potential damage caused by imposing a surcharge far exceeds the costs associated with processing card payments.

“Research supports the fact that businesses that have already scrapped payment surcharges are ahead of the game and are reaping the rewards through increased customer loyalty,” he said, pointing to findings from the 2015 consumer report, Every good buy is the next hello:

  • More than 90% of people consider not being surcharged as important to their repeat business;
  • 93% of consumers would like to see surcharges eliminated;
  • One in three consumers rate not being surcharged as extremely important in their impression of a business; and
  • Almost 75% of people will tell their friends and family to avoid a business because it surcharges.

“Outdated, regressive, harmful” 

Retailers and associations that have already pledged their support for Surcharge Free include the National Retail Association (NRA) , The Iconic, Coco Republic, and Platinum Restaurant Group, while the movement is backed by American Express.

“We want Australians to spend their hard-earned cash on the things they want to buy, not on inflated surcharge service fees,” said Ian Winterburn, CEO of the NRA.

“Although the NRA respects the right of retailers to recoup legitimate operating costs, we strongly recommend they should be recovered as part of the total cost of the goods or service, like all other legitimate business overheads. Through Surcharge Free we aim to turn the tide on this outdated, regressive, and harmful business practice once and for all. Brands need to provide Australians with the experiences they deserve to remain relevant and competitive in the current market.”

For more information on Surcharge Free, and to pledge their support, visit www.surchargefree.com.au.