Users don’t like user pays

A survey shows most respondents resent a surcharge on credit cards:

The survey, commissioned by public relations agency Impact PR, investigated the habits of Kiwi consumers and their perceptions of having to pay additional credit card surcharges.

The research showed the vast majority (90%) of customers would stop shopping at their regular store if a 3% credit card surcharge was added to their purchase.

Businesses have to pay a commission on credit card transactions so they’re just passing the cost on to the customers who’re availing themselves of the service.

However, the issue isn’t necessarily that simple:

Mark Devlin, owner of shopping website Showroom.co.nz, says retailers who add the credit card surcharge are short-sighted.

He says his New Zealand customers have no additional charges of any kind, whether it’s for payment by credit card or freight.

“What we may lose in margin we definitely make up for in customer satisfaction and repeat purchase. We wanted to create a ‘no surprises’ shopping environment where customers could feel confident purchasing a product without having gone through the whole process only to have charges added on the final screen.”

No surprises is a very good policy.

In New Zealand, unless it’s explicitly stated that something is GST is excluded we know it’s included and we’ll have to pay the price that’s stated.

When travelling I find it frustrating to see or be given a price then find it costs more because the price given doesn’t include taxes and other charges.

Nobody likes being charged more than the quoted price and most of us do have a choice of using cash or EFTPOS rather than a credit card if we don’t like surcharges.

However, rather than imposing a surcharge businesses could turn a negative for credit card users into a positive for others by pricing everything at 3% more then offering a discount for cash or EFTPOS.

3 Responses to Users don’t like user pays

  1. leftrightout says:

    Nobody likes being charged more than the quoted price and most of us do have a choice of using cash or EFTPOS rather than a credit card if we don’t like surcharges.

    However, rather than imposing a surcharge businesses could turn a negative for credit card users into a positive for others by pricing everything at 3% more then offering a discount for cash or EFTPOS.

    How much should the discount be?

    There is still a cost to the retailer of EFTpos and cash. And cash is a security risk, it must be stored and moved in a manner that discourages theft, whereas a credit card transaction is almost 100% secure for the retailer.

    And where does 3% come from? Not all businesses pay the same rate. I reckon it was pulled from the same bum that created the 15% holiday surcharge on stats in some bars and restaurants. It does not reflect the true cost and should be stuck down by the ComCom.

  2. The market will dictate what approach businesses take.

  3. leftrightout says:

    Yeah, and jesus will rise again like a soufle!

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