Companies are allowed to choose what kinds of payments they accept – and they are actually allowed to decline cash.
That’s why Aussie cafe Gloria Jean’s is allowed to trial cashless payments only in some shops.
And if you want to pay by debit or credit card, they can legally charge you extra.
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This has been the subject of debate recently.
The bosses of the nation’s biggest banks have backed a ban on credit card surcharges, but businesses are hitting back.
Excessive surcharges are banned.
However, there are rules, according to the ACCC, which companies must stick to
Here’s how it works.
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“Businesses can charge a surcharge for paying by card, but the surcharge must not be more than what it costs the business to use that payment type,” the ACCC says.
“If a business charges a payment surcharge, it must be able to prove the costs it is based on.”
So how much should this be?
As a guide, the Reserve Bank of Australia has estimated average costs for different payment types.
For Eftpos it’s less than half a per cent.
For Visa and Mastercard debit it’s between half a per cent and one per cent.
For Visa and Mastercard credit it’s one per cent to one and a half per cent
These rules don’t apply to Diners Club and American Express Cards, which cost businesses more to process.
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However many businesses will just charge a set fee.
Sometimes it will be if you are paying less than a certain amount.
This is allowed – but it “must not be excessive”. If it is, you can report them to the ACCC.
This is how those rules work.
For example, a company might set a 50 cents surcharge for card payments under $10.
The ACC’s example is this: If business’s costs for payments by credit card is 1 per cent and it charges a 1 per cent surcharge for credit card payments, a customer buying a coffee for $4 would pay a four cents surcharge.
If the business decides to charge a 50 cent surcharge for all card payments on transactions less than $10 and a customer buys a coffee for $4, that surcharge is a 12.5 per cent surcharge.
This would exceed the businesses cost of acceptance for that transaction, it says.
Go even deeper and there are more rules.
For example, if you have to buy by card because cash isn’t accepted.
If that’s the case, the business must include the surcharge in the displayed price.
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If you think a business is doing something wrong, you should talk to them, the ACCC says.
You can also report it to the ACCC.
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