Card surcharges ended on Thursday 1 October. By the weekend, the change was showing up somewhere new: the price on the menu board.
What's happening?
Under the card networks' no-surcharge rules, businesses can no longer add a surcharge when a customer pays by eftpos, Visa, Mastercard or Amex card. The RBA says card processing costs can be reflected in overall pricing instead. Some venues have done exactly that — and some increases are larger than the surcharge they replace.
As Yahoo Finance reported, Sydney worker Adrian Sereni paid $5.70 for a small almond cappuccino at Chatswood Chase, up from $5.50 days earlier: a 20 cent rise, double the old 10 cent surcharge. Stockspot's Chris Brycki paid $9.80 for a bakery order that cost $9.63 with a 13 cent surcharge last week. In Melbourne, a coffee van's large latte went from $6 including surcharge to $6.50.
Who it affects
Businesses are not hiding it. Peter Semaan, who runs the Rusty Rabbit cafe in Darlinghurst, told Reuters he raised prices for food and cold drinks by about $2 on average. Sydney bar owner Dre Walters also faces alcohol taxes that rise twice a year: “100% this will be passed on,” he says. Australian Restaurant and Cafe Association chief executive Wes Lambert told Reuters some venues were not prepared: he bought a coffee at Brisbane airport from a national chain still charging the surcharge.
Others are absorbing it. John Iodice, who runs The Vineyard in St Kilda, told AAP he will not add it to the bill: “Obviously, we're going to just cop it.” Nearby, Monarch Cakes manager Nikki Laski says the 92-year-old bakery will raise prices, partly because larger chains such as Coles and Woolworths already absorb card fees. “It's the small businesses that do that because they have to in order to survive,” she says. Cafes and restaurants run on margins of 2.8% to 3.1%, industry data cited by Reuters shows.
On the consumer side, the government estimates the ban saves about $1.6 billion a year in surcharge fees. The RBA expects the change to add around 0.1% to measured consumer prices — small and one-off, it says, since shoppers already paid those costs through surcharges, which are not in the CPI. The RBA has also cut the interchange fee cap on domestic consumer credit cards from 0.80% to 0.30%, expected to save businesses about $660 million a year.
What it means for you
The surcharge line is gone; whether the total changes is a pricing decision for each business. The RBA says the tagged price is the price you pay, whichever way you pay. Weekend and public holiday surcharges are still allowed, and Monday 5 October is a public holiday in NSW, the ACT, South Australia and Queensland, so one can still appear on that bill. And the ACCC says a card surcharge cannot just be renamed a platform, booking or service fee — though genuine fees for those services are permitted.
Happy dining! G