CUSTOMERS are increasingly turning up their nose at credit card surcharges, with research revealing one in four stung by the fees will refuse to return to that store.
The shopper backlash comes as the Reserve Bank announces it will review the regulatory framework for card-related payments, particularly in respect to interchange fees and surcharging.
The survey revealed that more than 70 per cent of shoppers will tell friends and family to avoid a business because of credit card or other payment surcharges while 30 per cent say they will abandon an online purchase when facing such fees.
Some 40 per cent of respondents said having to pay a surcharge makes them feel that their purchase is not appreciated, while a similar amount said the practice left them with a bad final impression of the business.
The study of more than 1100 people was carried out by the retail consultancy, Retail Doctor Group, and funded by American Express.
Payment surcharges include booking fees, credit card or Sunday surcharges and minimum spends.
Unsurprisingly, consumers overwhelmingly want to see such charges dropped altogether.
Retail Doctor Group chief Brian Walker said surcharging created negative customer experiences and reduced loyalty.
“Removing payment surcharges is likely to be one of the most powerful ways businesses can encourage customer loyalty, advocacy and improve sales,” he said. “Good business is based on customer service.”
The Financial System Inquiry led by David Murray recommended capping credit card surcharges to the “reasonable cost” of accepting the card.
MasterCard estimates the average Australian pays about $130 a year on such fees.
Published through the Herald Sun on March 5th 2015