ComCom Encourages Businesses To “do The Right Thing By Their Customers” When Surcharging

The Commerce Commission has issued an Open Letter on its work promoting appropriate surcharging and is encouraging businesses to do the right thing by their customers. The letter also highlights the Commission’s engagement with a selected group of larger businesses.

Commission Chair, John Small, says: “We think it’s important to clearly set our expectations of businesses, taking into account that our intent is not to promote or discourage surcharging but to focus on ensuring that where merchants do surcharge, that they do so at no more than the cost of accepting the payment."

Dr Small says, as a first step in part of the Commission’s broader and ongoing engagement, a group of larger businesses was selected to gain a deeper understanding of their surcharging practices.

Key areas the Commission was seeking to know more about include: 
• What information is given to businesses to allow them to surcharge appropriately
• How transparent surcharges are to consumers
• Whether or not surcharge-free payment options are offered to consumers.

“Businesses we have engaged with to date are ones that we would expect to have lower rates and are from industries including airlines, telecommunications, ticketing and parking bodies, as well as local authorities.”

Dr Small says that businesses have generally engaged positively with the Commission and have taken measures to reduce their surcharges or have provided reasons as to their current surcharging practices.

“We are particularly pleased to see those who have reviewed and are reducing their surcharges – including 2degrees who intends to reduce its surcharge from 1.75% to 1% later this year, as well as some councils who are reviewing and reducing surcharges for rates bills and other services. This is a win for consumers.

“We are yet to determine whether regulation in this area is necessary and believe our engagement strategy will allow us to learn more about surcharging practices, while encouraging businesses to do the right thing by their customers,” Dr Small says.

As part of its ongoing engagement, the Commission recently published information to help businesses to surcharge appropriately and to help consumers understand their rights when it comes to paying surcharges.

The Commission’s Open Letter is available here.

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