Recently I came across an article published by mybusiness magazine that I thought was very relevant in today’s cashless society. This was reinforced by an experience that I had not that soon after. The following is a summary of that article.
Businesses are being urged to weigh up the costs of credit card surcharges, as research suggests three-quarters of consumers actively dissuade peers from engaging with businesses using the practice. Research conducted by American Express suggested that such surcharges are more harmful for a business than beneficial.
More than 90 per cent of Australians view a lack of surcharges as important to repeat business, 93 per cent of consumers would like surcharges removed altogether and 75 per cent admitted to telling people they know to avoid a business that surcharges, according to the research.
National Retail Association CEO Ian Winterburn suggested that instead of using surcharges to make up for operating costs, business owners should consider incorporating any loss into the total cost of the product. This might involve incorporating a small addition to standard prices as part of an overall pricing strategy.
The reality is that surcharges are an outdated, regressive, and harmful business practice. Brands need to provide Australians with the experiences they deserve to remain relevant and competitive in the current market – this certainly would involve removing any surcharges on card transactions.
Surcharging creates negativity among customers and a decision not to surcharge is part of the exceptional customer service that businesses must aim to deliver.
The federal government identified excessive surcharges as a cause of concern for consumers, announcing in February that laws to cap the fees had been approved by Parliament. The date for the introduction of this cap is yet to be determined.
Some businesses may perceive this as permission for them to surcharge, as long as they don’t do it excessively, failing to realise the consequences introducing a surcharge will have on their business.
Businesses to focus on the bigger picture of the customer experience. The reality is the damage caused by imposing a surcharge can far exceed the costs associated with processing card payments.”
Recently, I visited a local café for dinner with friends. We had an enjoyable meal and were given excellent service by the service team. However, when we came to pay at the end of the night, we were told that there was a 1.5% service fee if we paid by credit card. To be quite honest, I was surprised and insulted by this. As a result, what I remember of that night is not the great food and service, but the 1.5% service fee that they wanted to charge me at the end of the night. Although this charge would not have been a large amount, it was this policy that I really remember. And, you know what – when I talk to others about this venue I always mention the 1.5% service fee.
At Green Taylor Partners we made a decision over 15 years ago to remove any impediment from a client paying our account on time. This meant that we needed to provide all options for payment as well as not charge for payments made by credit card. A very simple policy that does not cost much but enhances goodwill!