Exorbitant flybe card charges

NFH

The airlines levy additional charges for payment by debit and credit cards in order to make fares look cheaper. The effect is to mislead consumers by luring them into booking a flight at a lower advertised fare, only to be hit with a surcharge at the time of payment. Adding charges throughout the purchase process is known as drip pricing which is widely considered to be a questionable practice.

According to research conducted by Which? magazine, the cost to airlines of accepting cards is a flat fee of 10p to 20p per transaction for debit cards and a percentage of 1% to 2% for credit cards. It is absurd that when booking return flights for a family of four, it costs Flybe and Ryanair no more than 20p to process the payment, but Ryanair charges £40 and Flybe charges £36.

The airlines believe that by offering one free payment method, they can legally levy the surcharges separately from the advertised fares instead of including the surcharges within the advertised fares. Therefore in order to reduce the number of passengers qualifying for a surcharge-free payment, the airlines choose the surcharge-free card type according to the card type's rarity rather than according to the transaction costs of accepting that card type. This is evidenced clearly by Visa's domestic interchange reimbursement fees and MasterCard's intra-country interchange fees (both of which exclude the additional mark-up added by the acquiring bank). If the card surcharges were the result of the costs of accepting a card type, then the surcharge-free card types would include all those with the lowest transaction fees rather than the card types which are rare.

These card surcharges do not benefit the consumer and consequently most consumers are against them. A minority of people in this forum support the surcharges because they are frequent flyers on the affected airlines and have invested their time and effort in obtaining the obscure payment methods required to avoid the surcharges. The lower all-in fares enjoyed by this minority are subsidised by the majority of passengers who do pay the surcharges; hence this minority supports the status quo for selfish reasons rather than for any moral or ethical principle.

The_Groat_Counter

tightarsey wrote: »

flybe.com charge genuine, valid Cooperative Visa Electron Cards (with a Visa Electron Logo) £18 on flybe.com, when there should be no fee. The cards are treated as Visa Debit. flybe.com should be forced to repay every penny of these fees, as they are incorrectly classifying the card, to their advantage. Must amount to several hundred thousand pounds in fees, if not millions.

I'm guessing the problem here may be as follows - Co-Op Bank, like almost every other bank (notable exception being Halifax with their Easycash account) have shifted over from issuing Visa Electron cards to issuing plain vanilla Visa Debit cards (with zero floor limits) to their Cashminder account holders - however I think the BIN range(s) they used remained the same. So maybe whilst the card might look very much like an Electron card to you or I, the payment card processing systems now think it's a Visa Debit card.

malkie76

These card surcharges do not benefit the consumer and consequently most consumers are against them. A minority of people in this forum support the surcharges because they are frequent flyers on the affected airlines and have invested their time and effort in obtaining the obscure payment methods required to avoid the surcharges. The lower all-in fares enjoyed by this minority are subsidised by the majority of passengers who do pay the surcharges; hence this minority supports the status quo for selfish reasons rather than for any moral or ethical principle.

Surcharges are 100% avoidable, unless you claim electron doesn't exist.
I'm happy for airlines to make their costs transparent and pass bank charges onto customers.

NFH - given you feel so strongly, what steps have you taken? (eg lobby parliament). Or are you simply an armchair grumbler?

[edit]

I've only flown RyanAir once, but it was a perfectly acceptable experience.

NFH

malkie76 wrote: »

I'm happy for airlines to make their costs transparent and pass bank charges onto customers.

As I've already demonstrated, this has nothing to do with passing on bank charges to customers. If this was the reason, then when it costs the airlines 20p to process a debit card transaction, why does Ryanair charge £40 and does Flybe charge £36 to process a single payment for a family of four? And why does Ryanair charge nothing for prepaid MasterCard when it actually costs them more to process this than a debit card? And why does Flybe charge nothing for Visa Electron when it costs them the same to process this as other Visa debit cards?

malkie76 wrote: »

NFH - given you feel so strongly, what steps have you taken? (eg lobby parliament). Or are you simply an armchair grumbler?

There's no need for me to lobby Parliament, as others with more influence are already taking steps to end this unfair practice. Instead I've pledged my support for Which's super complaint to the OFT. I hope that others here will do the same.

malkie76

If this was the reason, then when it costs the airlines 20p to process a debit card transaction, why does Ryanair charge £40 and does Flybe charge £36 to process a single payment for a family of four?

Brand new computer chips cost pennies to make, yet they cost hundres to buy........... I think the answer is somewhat obvious.

There's no need for me to lobby Parliament, as others with more influence are already taking steps to end this unfair practice. Instead I've pledged my support for Which's super complaint to the OFT. I hope that others here will do the same.

So essentially nothing ? Why are you so committed on a website, but toothless in reality ?

jamesbrownontheroad

tightarsey wrote: »

flybe.com charge genuine, valid Cooperative Visa Electron Cards (with a Visa Electron Logo) £18 on flybe.com, when there should be no fee. The cards are treated as Visa Debit. flybe.com should be forced to repay every penny of these fees, as they are incorrectly classifying the card, to their advantage. Must amount to several hundred thousand pounds in fees, if not millions.

This has nothing to do with FlyBe, it is the fault of the banks.

I used to have a Co-Op Visa Electron which, some time last autumn, went from being a Visa Electron to a Visa Debit overnight, with no warning. Neither EasyJet nor FlyBe, after months of accepting it, would take the card (and as I was booking a frequent commute, I can tell you that both refused it from the same day, so it wasn't as if one airline changed their policy).

Co-Op admitted to me over the phone that in the transition from issuing new Visa Electrons to issuing only Visa Debit, existing Visa Electron cards were being reclassified as Visa Debit. The digits in the long card number that identify the card type and bank were re-assigned to Visa Debit rather than a new number being generated. There is no workaround.

As a result, I switched to Halifax, whose Easycash account still issues a Visa Electron.

NFH

malkie76 wrote: »

Brand new computer chips cost pennies to make, yet they cost hundres to buy........... I think the answer is somewhat obvious.

Using the same analogy, what Ryanair and Flybe do is similar to if I order a PC with 1GB of RAM but increase the ordered spec of the hard drive from 100GB to 400GB, then as well as paying for a 400GB hard drive, I am also charged for 4GB of RAM instead of the 1GB that I receive. If you book flights with these airlines, although they process only one payment per booking, they charge the payment fee 8 times when booking return flights for a family of four. The card surcharge doesn't bear a reasonable relationship to the bank charges incurred. Justify that one, malkie76!

malkie76

The card surcharge doesn't bear a reasonable relationship to the bank charges incurred.

Computer chips don't cost hundreds of pounds to manufacture, yet that's what the company charges.

I'm not sure you understand my point.

NFH

malkie76 wrote: »

I'm not sure you understand my point.

Yes, I do understand your point. You're drawing a parallel between production costs vs retail costs of computer chips and airline card surcharges. My point is that when I order a PC which contains a computer chip, when I increase the quantity of another component, I don't get charged for more computer chips. But that is what Ryanair and Flybe are doing. You increase the number of flights on a booking, and are charged more payment fees, despite there continuing to be only one payment!

It is clear that the card surcharges are in reality a component of the fare, otherwise they would be applied per payment and not per flight segment.

DavidHayton

Drip pricing! :mad:

These three ladies make the point far more clearly than I can.
http://www.youtube.com/watch?v=HPyl2tOaKxM

(It's the Fascinating Aida clip, in case you have already seen it)

David