Dealing with card surcharge errors
If you’ve ever used a card to buy something and been charged more than the retail price it might have had a card surcharge applied. Card surcharges are legal in Australia. But retailers can only apply card surcharges that cover their reasonable costs of accepting the transaction. If you think you’ve been charged an incorrect surcharge, you may have a right to contact your bank to complain, or try using Ajust to help with your card surcharge issue.
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Sometimes, businesses make surcharge fee mistakes
Card surcharges are a standard practice in Australia, however there are some limitations around what can be charged and when. To be able to identify if a card surcharge has been correctly applied, it’s important to get a clear understanding of the basics.
Businesses will often pass on any additional costs from processing a transaction to their customers. So, you’ve likely taken a look at your transactions from time to time and noticed an additional fee has been applied, such as a bank processing fee. This is known as a card surcharge, an additional transaction fee businesses charge consumers to cover any credit and debit processing fees.If you think you’ve been charged an incorrect surcharge, you may have a right to contact your bank to complain, or try using Ajust to help with your card surcharge issue.
The surcharge amount itself will be dependent on a number of factors, such as the size of the business, and the type of card you use. Some businesses might have higher surcharge amounts, while others might have lower ones, and some may not pass on a surcharge at all. No matter the size or type of business you’re dealing with, there are rules about what a business can pass on to its customers by way of a surcharge. Businesses can only pass on their reasonable costs of accepting a card payment (we’ll look at this in more detail later) when applying a surcharge.
As we mentioned, the practice is perfectly legal here in Australia. However, it’s still possible for consumers to be charged an incorrect amount or a fee that should not be there. When this happens, the card surcharge is no longer a legal fee. That’s why it's always a good idea to take a look at your charges and see if anything seems off.
If you notice you have been charged an excessive amount for a card surcharge, then you can take steps to get this rectified. Most businesses are aware they cannot apply unreasonable surcharges and are often willing to correct their mistakes.
Noticing a wrong card surcharge
So, you have taken a look at your statement and spotted a surcharge that looks too high or like it shouldn’t be there. Don’t worry - this is a mistake that can be corrected.
The Australian Competition and Consumer Council (ACCC) states that businesses need to follow certain rules when applying card surcharges. Each business must ensure the following: :
- They provide alternative means for payment. A business cannot apply an additional surcharge if they have not provided another way for the customer to pay without incurring the card surcharge. If this is the case, they need to include it into the total price of the good or service being sold.
- They can defend the charge. Every business applying a card surcharge needs to be able to justify the charge and the amount.
- They charge fairly. A business can only pass on their own reasonable costs of accepting a card transaction.
This means, a business must:
- Not charge the consumer anything beyond the surcharge amount that the business pays.
- Ensure that the amount passed on is for the card surcharge alone and nothing else (i.e. no labour costs, equipment costs etc).
- Disclose the fee on any statement or receipt.
How much should a card surcharge be?
On average, the cost of a surcharge is somewhere between 0.5% and 1.5%. However, this only applies for standard card payments, namely Eftpos, Mastercard and Visa. In some cases surcharges for cards like American Express, or services like Paypal, may be different.
It’s not the ACCC or banks that set out the main rules for card surcharges. The Reserve Bank of Australia (RBA) sets out the regulations businesses must follow when applying a surcharge. The RBA requires that all businesses must have an annual statement from their bank (or any other payment facilitator) demonstrating the average percentage costs for the card types. If you’re contacting a business, there’s a good chance they will be aware and up to date regarding their current surcharge numbers.
Get in touch with the right people for help
When a surcharge doesn’t comply with the regulations, then your first step should be to contact the business that made the card surcharge first. Businesses do make mistakes, and once they are aware that something has gone wrong, they are usually happy to fix it. When you’re contacting a business regarding a previous transaction, make sure you have all your documents and information you will need first. That includes the invoice containing all the right details- that way the business will be in a better position to assess your situation.
If you’re not able to resolve the matter directly with the retailer, consider talking to your bank. Contacting your bank is a great way to get more information as they can provide details about their cost of acceptance for cards, percentage rates and much more. In some situations, your bank may be able to help with an invalid charge that was made by a retailer - this happens via a process known as a ‘chargeback’. Consumers can raise a chargeback request with their bank for any invalid or unauthorised transactions. If the business disagrees that the transaction was invalid, they are able to provide evidence to the bank to dispute it.
What if my card surcharge problem still doesn’t get solved?
If reaching out to your bank or the business hasn’t resolved your card surcharge issue, then you can still notify the ACCC about the problem. The ACCC cannot resolve disputes, however they do have the authority to conduct an investigation and impose regulatory compliance measures. You can contact the ACCC online or by calling them.
In most cases, a card surcharge should be sorted easily with the bank or retailer. Ajust can help you with raising a complaint with your bank. Get started by filling out our complaint form - it’s quick, easy and free.
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