Surcharges for DD/CCs

Gromitt

I thought there was something brought out now that stated that companies were not allowed to charge extra for handling CCs and DCs? Ie, they either accepted them or didn't. No "We'll accept for a fee". business.

I spent £10 in a shop today and they tried to charge me £10.25 for paying with a CC. I queried this and they said it was 2.5% for CCs and 25p for DCs. This wasn't posted anywhere. I said "No thanks" and walked out the shop (didn't have £10 in cash), leaving the items on the counter.

chattychappy

As far as I know, it's "not yet" (willing to stand corrected).

As I understand it, Which? triggered a review by making a super-complaint. The idea is that surcharges would have to be limited to the cost of taking the said payment method (so might not catch your situation).

CC merchant agreements can also restrict fees to the cost of handling the payment method. They often attempt to stop differential pricing entirely, but this is not enforceable by the CC. (And wouldn't be enforceable by a consumer anyway.)

Aside from that, if a shop advertises it takes CC, then it should probably advertise the surcharge either in the same place or on the price tag.

eddddy

Hi Gromitt

As I understand it, the legislation will ban excessive cc surcharges. Which? (who kicked off the complaint) think that 1.8% is reasonable for CCs - and and a flat 20p for DCs.

So assuming 1.8%, you may only stand to save 7p on the transaction you mention, under the new legislation.

But I absolutely agree that shops should have clear signage, if they decide to apply a surcharge.

Gromitt

Thanks for that. Maybe after a few other people leave stuff on the counter they'll either get a sign done or get rid of the charges. If their margins are that slim that 25p will break the bank on £10 of goods, then I think they should rethink their business plan!

I was in Currys today and they completely refused to reduce an item that was £399, offering only to throw in a single months useless Currys branded insurance (and only then if I allowed them to setup a direct debit). So I paid on my CC, costing them about £10, of which I get £3.99 cashback.

mynameistallulah

Gromitt wrote: »

Thanks for that. Maybe after a few other people leave stuff on the counter they'll either get a sign done or get rid of the charges. If their margins are that slim that 25p will break the bank on £10 of goods, then I think they should rethink their business plan!

Or maybe they'll just increase their prices to cover the cost? Then you'll have to pay it however you choose to pay.

CLAPTON

Gromitt wrote: »

Thanks for that. Maybe after a few other people leave stuff on the counter they'll either get a sign done or get rid of the charges. If their margins are that slim that 25p will break the bank on £10 of goods, then I think they should rethink their business plan!

I was in Currys today and they completely refused to reduce an item that was £399, offering only to throw in a single months useless Currys branded insurance (and only then if I allowed them to setup a direct debit). So I paid on my CC, costing them about £10, of which I get £3.99 cashback.

small shops work on very small margins; CC charges will often wipe out their margins

have you ever run your own business?

maybe you are right, they should all close down
or maybe you would suggest a better business plan (maybe increase their prices for everyone even cash customers?)

Gromitt

CLAPTON wrote: »

small shops work on very small margins; CC charges will often wipe out their margins

have you ever run your own business?

Or maybe they should just take advice from the shop further down the road. Not only were they slightly cheaper on some products, they accepted payment by CC with no arguments. They even had a sign behind the counter saying "CC & DC payments accepted for payments in excess of £5 (excludes bill payments and phone topups)".

jon142

I buy a newspaper every morning from W H Smith on the way to work ( 30p ) and use my AMEX card.

Quite often i think to myself it would be cheaper for WH Smith to let me walk out with this paper rather than actually accept a payment via CC.

Gromitt

CC is meant to be cheaper than DC for small value payments, so you might find with the amount of transactions they push through it probably only costs them about 1p.

Contactless is supposed to be even cheaper. Not sure if it actually is.