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Tuesday 5 January 2016

Credit card surcharge humbug!

My all too relaxed post holiday reverie was jolted rudely into reality at the hotel check-out, by one of the more recent scourges of modern consumerism, the credit card surcharge. It is not the first time that consumers have faced such direct challenges to, let's call it, "sensible product design". Who can forget the Leyland P76, especially if you owned one. Or the infamous cling wrap that cannot be cut by the device specially provided for the purpose, leaving consumers far from .. happy. Or, leaf-blowers that somehow manage to generate more noise than a jumbo jet. What is more appropriate in a device likely to be used outdoors on peaceful week-end afternoons. Or the, dare I even use the word, 'comfort' of passengers in 'cattle class' on today's economy airlines. This is tough competition.  But of all the indignities foisted on the poor consumer, the credit card surcharge stands out as a pervasive assault on our hip-pockets and an insult to our intelligence.
"Would you like surcharge with that?"
It seems reason alone has not sufficed to stamp out this blatant exploitation of our ovine tendencies. Right now there must be hundreds of straight-faced hospitality employees asking their patrons "would you like surcharge with that?" And we poor schmucks take it. Oh yes, you could rationalise that "it is reasonable to pass on a charge, after all the organisation must pay this charge". 

Oh no it isn't! Not at all.

Firstly the organisation is usually passing on a disproportionate charge. Merchants' service fees are on average less than 1% for Visa and MasterCard and about 2% for American Express and Diners. While most surcharges are ~1.5% -3% respectively and for some organisations, think airlines, the charges are even more exorbitant (see Are you being charged to charge?). So at the very least some part of this surcharge is a grab for money with the 'excuse' that a charge is just being passed on.

Secondly, companies seem to single out credit card fees to pass on to consumers. There are many costs of doing business and many of these vary depending on a whole range of factors; wages, costs of materials, transport, electricity and so on. Yet we don't receive a toilet paper usage surcharge at a hotel, or an overtime penalty surcharge when we buy petrol. All these costs are bundled into the price of goods and services and there is no reason it should be different with credit card surcharges. 

Finally and most significantly a credit card surcharge is total blarney, since it is doubtful that the cost of processing a transaction by credit card is more than processing it by cash. If you consider the additional costs that would be incurred if the transaction were paid by cash; the employee's time for collating, recording, checking the takings, transporting, banking, 'shrinkage' and bank costs. It would be fair to suggest that cash may cost more than a card. So instead of charging us for the use of a card they should be offering a discount!

Well this is one consumer who has had enough. I will henceforth take great wads of cash to pay for all my heretofore credit card charges. Imagine the look on the restaurateur as I hand over a bag of 5c coins to pay for my dinner ! I am looking forward to it.

Will you join in my crusade? Who will be strong and stand with me?
It may take a whole decade , but we can make sales surcharge free?
Come and burst your piggy banks, Lets use cash for every sale
All consumers will give thanks,  without doubt we will prevail!
(with apologies to Les Miserables)

You can see I am still in the holiday spirit - don't worry it will wear off soon.

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