Shack­les raised by card sur­charges

Central Leader - - OPINION -

Some­times I storm out of shops. I do it po­litely but there are cer­tain treat­ments I will not put up with.

Overly-pushy sales peo­ple press my but­ton, as does id­iocy and lack of knowl­edge in a salesperson. But the last time I headed for the door in a stew with my po­ten­tial pur­chases dis­carded on the counter, it was over a re­cently in­tro­duced credit card sur­charge. I haven’t been back since. But if I thought my act of de­fi­ance would make any dif­fer­ence I was in­formed this week by the head of a ma­jor credit card com­pany how wrong I was.

The shack­les came off busi­ness in 2009 when Visa, Mastercard and other card com­pa­nies were told by the Com­merce Com­mis­sion they could no longer pre­vent sur­charg­ing. For a few years not much changed. Now the tide is rac­ing in.

There was a sim­i­lar pat­tern in Aus­tralia I’m told by Visa coun­try head Caro­line Ada.

New Zealand is now ex­pe­ri­enc­ing an ac­cel­er­a­tion of sur­charg­ing and the lat­est to join is a big­gie. From Au­gust 1 Tele­com will be­gin charg­ing 1.5 per cent for credit card pay­ments.

Sur­charg­ing is fast be­com­ing the new norm as it is now in Aus­tralia. But is it fair?

Retailers ar­gue that ac­cept­ing a credit card pay­ment brings costs and it is only fair to pass them on, oth­er­wise credit card cus­tomers are ef­fec­tively be­ing sub­sidised by oth­ers.

OK, but credit card pay­ments also bring ben­e­fits to busi­ness, most notably caus­ing a drop in cash and cheque pay­ments, which are ex­pen­sive to ad­min­is­ter, and a rise in pur­chases on credit which oth­er­wise the retailers wouldn’t get. Credit cards have also helped fuel the rise in in­ter­net com­merce, which has al­lowed busi­nesses to cut costs dra­mat­i­cally.

Based on this ar­gu­ment, chatty peo­ple should be charged more as they take up more time at the till, as should change fumblers who take up even more.

I’d sug­gest a small levy on peo­ple who haven’t got their Onecard or Fly­Buys card ready to swipe as well as they im­pose a real time cost on retailers.

OK, I am hav­ing a bit of a laugh, but stud­ies es­ti­mate the costs of cash trans­ac­tions to retailers at be­tween 1.3 per cent to 2.5 per cent of the value of a pur­chase.

But what re­ally gets my goat about sur­charges is they are so var­ied. Take the coun­cils. Why does Tau­ranga levy 1.3 per cent, while Auck­land City charges 2 per cent?

Then there are those who levy a flat fee re­gard­less of what kind of per­cent­age of the over­all cost it adds up to.

It doesn’t feel like this is en­tirely about cost re­cov­ery, es­pe­cially when you con­sider my bog-stan­dard Visa card costs less to ac­cept than many other kinds of cards.

As con­sumers, our op­tions are limited. What we can do is com­plain, favour busi­nesses which do not sur­charge and avoid the levy by us­ing cash and cheques. Busi­nesses should en­gen­der loy­alty in cus­tomers by guar­an­tee­ing their sur­charges are set up to earn them no sneaky prof­its. Any vol­un­teers?

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