What To Do About Surcharges

A retailer should notify you prior to the sale if it intends to charges you a surcharge when you use your credit card. The surcharge must be to cover their fees, they cannot be used to boost profit.

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1 discuss & protest 2 pay with cash 3 shop elsewhere

What Can You Do?

The settlement is coming into force between now and April and fees (for retailers) are expected to reduce.

If a retailer charges you a surcharge to cover the interchange costs, then that is what it must do. It would be misleading under the Fair Trading Act if a retailer used the surcharge to increase revenue. So a surcharge should represent approx. 1% to 3% of the purchase cost. Interestingly, this means that the surcharge is being charged on the GST component of the sale!

If you disagree with being asked to pay a surcharge for paying with your credit card, you could suggest to the retailer the following points:

  • the fees paid by the retailer for accepting credit cards should now reduce
  • that if you paid in cash the retailer may have to pay their bank cash handling fees
  • that if you pay by personal cheque their are administrative hassles and clearing time penalties
  • offer to pay in cash and ask for a cash discount
  • that if they value your (regular) business they shouldn't be so petty

    • .

    Already been Surcharged?

    If you have been charged a credit card surcharge previously (before the settlement), you should ask the retailer for a copy of the invoice/receipt. This may identify the reason for the extra fee. You could contact the retailer and ask them if their Merchant Agreement permitted them to levy a surcharge. You should ask them which bank they use. You can ask for the surcharge to be refunded to you if you believe it was not proper. It may take some time.

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