MSE News: Which? launches card surcharge super complaint

in Credit Cards
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This is the discussion thread for the following MSE News Story:

"The consumer group has written to the OFT asking it to investigate the charges, which it says are "unjustifiable" ..."
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  • JimmyTheWigJimmyTheWig Forumite
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    It says lettings agent Foxtons charged a customer £25 to pay a £5,000 deposit to rent a flat
    That's only 0.5% which isn't unreasonable, is it?
  • All businesses are subject to credit / debit card processing fees from the big players Visa and Mastercard, these are typically in pennies although for large credit card payments they will probably be in £'s, no doubt other businesses do pass on these charges but they're hidden in their overall cost.

    The main issue here is that these businesses are explicitly identifying these charges. I would imagine in most cases this is to make their headline pricing look lower.
  • GarethRGarethR Forumite
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    I can understand the example at the top but when you are charged by the cinema to book your tickets online then thats a joke, its a good £24 for myself, the missus and young un to go watch a film, based on this figure we are charged more than 10% for using a card to make the payment, which is an absolute con and something should be done to stop it!

    Airlines are just as bad and it's comical the fella at ryanair or should I say risingfair starts with the insults towards Which for launching the super complaint... says it all really
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  • zx81zx81 Forumite
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    Agree with JonnyBoy10. This is really an issue of whether people want to explicitly see the cost breakdown of whast they're buying, or have it all hidden in one overall fee. While I don't like having to pay credit card surcharges, if they are removed then the cost will be readjusted so that everyone pays towards the card costs, whether or not they use a card.

    So assuming a product costs £100, and there is a £5 surcharge for paying by credit card, and 50% of people use a card - the product will then move to costing £102.50 for everyone, regardless of payment type. Credit card users win and other payers lose.

    The simple advice for anyone is to establish the total cost and see if you're better off buying elsewhere. If Ryan Air's £40 ticket plus £40 credit card charge is still cheaper than BA's £100 ticket, then go with Ryan Air. If not, then don't.

    I would like to see the charges made more explicit upfront though, so you don't get to the end of a complex buying process and then find a large fee added right at the end.
  • As ZX81 says, whichever way it is sliced we will end up paying.

    I've even been charged for this by my local council and by HMRC when I underestimated how much to put by for income tax. Each of them charged 1.5% I think - which is probably a fair reflection of what they were charged by the card company.
    Of course another way of dealing with it would be for the retailer to pay nothing and for all the cost to fall to the consumer (in higher interest charges/fewer special offers). Ultimately, this may be the fairest way of all - though certainly unpopular - even with the card companies presumably.
  • dggardggar Forumite
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    I seem to recall that when credit cards were first introduced, (probably about 40 years ago), the there was a legal requirement for the retailer to charge the same price irrespective of the method of payment.
  • problemcashbackproblemcashback Forumite
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    why do ticketmaster charge you the same to print out tickets as they do to send them to you :)
  • thenudeonethenudeone Forumite
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    dggar wrote: »
    I seem to recall that when credit cards were first introduced, (probably about 40 years ago), the there was a legal requirement for the retailer to charge the same price irrespective of the method of payment.

    I think there was, but that was changed some time ago. It costs retailers to process credit card transactions so it's reasonable that they are allowed to charge a reasonable amount to cover their costs as long as it's clear. 3% should more than cover the differential (it costs them to process cheques and cash as well, just differently).
    What is unreasonable is adding, say, £5, to the bill at the last possible point in the buying process, when it's almost unavoidable.
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  • spikyonespikyone Forumite
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    zx81 wrote: »
    So assuming a product costs £100, and there is a £5 surcharge for paying by credit card, and 50% of people use a card - the product will then move to costing £102.50 for everyone, regardless of payment type. Credit card users win and other payers lose.

    Sorry but I don't agree with this kind of argument.

    If you buy something online, you can't (ordinarily) pay cash or cheque. There is no reason in the world for websites to add a separate surcharge for paying by card; it's just a con to make headline prices look lower.

    Secondly, which do you think businesses prefer - an automated electronic transaction that puts the money straight in their accounts, or a wedge of cash that someone then has to count, bank, etc.? There are costs associated with using cash, it's just that it's far less easy for the retailer to justify them to the "average" consumer.

    In Ryanair's casse it's an even bigger scam - no fees if you use a type of pre-payment card that, coincidentally, they offer... (inserts not-at-all-surprised smiley)
  • zx81zx81 Forumite
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    spikyone wrote: »
    If you buy something online, you can't (ordinarily) pay cash or cheque.

    Secondly, which do you think businesses prefer - an automated electronic transaction that puts the money straight in their accounts, or a wedge of cash that someone then has to count, bank, etc.? There are costs associated with using cash, it's just that it's far less easy for the retailer to justify them to the "average" consumer.

    But you can pay by debit card, which generally (not always) doesn't attract a fee.

    As to what they prefer - debit card payments as a rule, which is why the pricing tends to favour them.
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