Retailers Reluctant To Add Credit Card Surcharges

Retailers So Far Reluctant To Add Credit Card Surcharges

Retailers can now surcharge customers who pay by Mastercard or Visa, but so far the overwhelming majority have been reluctant to, claims the head of Auckland's leading retail district.

"The likes of some petrol stations are adding a surcharge for major petrol purchase but for almost every other retailer it's a bit of a Mexican stand-off at the moment. Given it's such a sensitive consumer market out there, you'd have to be a brave retailer to start bumping up the price of purchases for the majority of credit card users," says Cameron Brewer, chief executive of the Newmarket Business Association.

A recent settlement between the Commerce Commission and major credit card companies allows for surcharges to be passed onto the consumer

"Surcharges will probably be more commonplace in the future. However given that New Zealand retail is just getting back on its feet, no one's wanting to scare the horses just yet. What's more let's not also forget just how many transactions these days are credit card ones For many the credit card comes out more than the debit card as people try to build up the likes of points.

"Any retailer who starts charging Mastercard and Visa customers a bit extra will only leave them with a sour taste in their mouths. Surcharge signs on any retailer's counter will just give their competitor an instant advantage."

"Most New Zealanders are naturally suspicious of credit card companies given the likes of interest rates. To then be surcharged by retailers would really annoy them. It would feel like a double whammy. They're getting hit from both sides."

Mr Brewer also says while it is now retailers' right to charge extra on payments made with credit cards, many will be reluctant to in the current environment.

"This year looks more positive for retail, but let's not forget that while consumer and business confidence has rebounded retail trade has been a bit slower to pick up. Retailers are playing it safe, seeing what their competitors are doing, monitoring any surcharges backlashes, and probably waiting until the economy is back in full swing, before they even contemplate introducing a surcharge," says Cameron Brewer.

ENDS

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