We did it! Unfair card surcharges are being banned

If you are referring to British Airways, while it is supposed to be the ‘national airline’ of the UK, I cannot say that they are the most competitive airline.

They should be paying sponsorships from their profits and not impose UNFAIR extra charges on consumers.

A £4.50 booking fee, if you paid by card, is also unfair.

Hi Peter,
Thanks for clarifying card fees. I am concerned whether the Which? campaign will be able to put pressure on the government to ensure that unfair card charges are stopped. This has already become a free for all because the implementation of the EU directive does not come into effect until later this year. It does seem that companies, including arlines, have adopted the tactic of introducing booking fees to try and fool consumers about hidden charges.

Can Which? please shed some light on the current situation and whether the EU directive will force companies, banks etc., to drop their unfair charges and halt rip offs of consumers.

Hi Karen,
You have made a valid point and I really do believe that Which? on behalf of ripped-off Consumers’ should now launch another campaign, to stop these higher unfair card charged. Why are companies and banks jumping on the gravey train by imposing extra charges, ahead of the government’s legislation later this year?

The cinema will incur a small cost to take debit cards and will make a profit on the card charges. The same applies when they sell you popcorn. If there is an opportunity to make a profit, many companies will do it.

Hi Edward long time since last messages
Once again your making a mistake of naming Ie Cameron. I agree with everything you are saying but lets not forget as you have brought it up Labour had 13 years and did nothing about this item , so please Edward stop using politics all the time. THEY ARE ALL AS BAD AS EACH OTHER.
Your friend
Norman
Ps at a recent auction (weds) I had to pay 1.98% of total price of items this was on top of 15% auction site fees.

In reply to Easyjet dropping the £9 fee. I recently tried to book flights and yes they have dropped that fee but now have allocated seating which they charge you for! I do not know of another airline that does this. So they have got round this already. I declined to pay the charge and booked with another airline. I think we have to vote with out feet.

Angela B, Do you mean that you cannot complete your booking without buying allocated seating, or that if you wanted allocated seating, you had to pay extra? Some regular carriers (e.g. Malaysia Airlines) levy a charge if you want to book an allocated seat, although you can turn up at the airport and take your chance.
Quite right to vote with your feet – it is the only language rip-off merchants understand.

In response to Angela B’s comment on the booking fee for an allocated seat, you do not have to select a seat. If you choose not to select where you want to sit their system will allocate one at random. My wife and I fly easyJet quite a lot and for us, paying a few pounds extra to avoid the old easyJet scrum/cattle-market is simple heaven. Other airlines also charge fees for seats – I flew Aberdeen to Southampton with Flybe on my own recently and when booking online eventually managed to find the way of NOT paying a seat fee and letting the system allocate me one. At least on easyJet the default position is that you don’t pay this fee unless you decide that you want to select your seat.

Just use a debit card. DVLA and many other organisations make it clear that there is a surcharge for credit card payments to cover what the credit card companies charge. If DVLA did not pass on this charge, those who pay by credit card would be subsidised by the rest of us.

Credit card surcharges cover more than processing card payments, for example billing, subsidising those who take advantage of free credit and pay their bill in full every month, dealing with those who get into debt and providing protection for purchases over £100.

I ask if there is a credit card surcharge and if so, I pay by debit card and expect the transaction cost to be met by my bank.

Fair enough. Not everyone has a debit card. It is possible to pay vehicle excise duty at some post offices, either in person, or by post for the cost of a stamp.

All credit card providers have to make provision for the cost of dealing with those who get into debt. With customers being given high credit limits and the typically high interest charges charged, quite a number of people do get into debt. If you are a good driver, you will be subsidising those who are not.

I believe that credit card companies charge retailers and service providers a percentage rather than a fixed price for their service, whereas retailers and service providers usually have a fixed charge for customers using a credit card. Thus DVLA is charging the same charge irrespective of whether the VED is £20 or £465.

I hope that most car owners have the sense to pay in a way that avoids a surcharge. I have suggested three options.

No one forces you to use a credit card to make a purchase. The fee is clear and upfront from DVLA – I use a debit card (probably easier to get from your bank than a credit card). Mind you, in the olden days you had to make a visit to the post office – how much would that cost now in fuel, parking – £2.50 doesn’t go that far. The same applies to my Council Tax.
When I do use a credit card I pay off in full, so apart from getting protection and convenience, I benefit (but not much these days!) from between one and two months free credit. I should thank those who do pay the extortionate interest rates for that.

Update – the fee of £2.25 for three tickets applies even though the adult ticket is free! So the charge applies to a transaction of £5. If there were 2 adults then the charge would be £3 on a £5 transaction – or 60%! What is the record for largest percentage fee?

Cinema goer, you may feel aggrieved, but previously you were being subsidised by those paying with cards. Remember the real cost to the cinema of a CC transaction is only about 2% (say 15p on a £7.50 ticket). I regard the result as a success because the true cost is now displayed up front and the rest of us are not subsidising you!
Charging 50p or whatever to use a card (which of course is probably how most people pay) is just a way to reduce the headline price but make the profit up elsewhere. All booking or admin fees should be banned – that’s part of the cost of running the business.
The other inconsistency is that if you pay with cash, the cinema has costs associated with security and banking, so it probably costs as much per transaction as a card!

Sorry Robert, I have to disagree with you – your “real” cost takes no account of the cost of renting the terminals form the banks, the cost of the telephone call made every time a card is inserted, the cost of the electricity to run the terminals and the fines which the banks impose if the retailer does not process enough transactions to generate the stipulated revenue (for the bak) in processing fees.

This is the big issue with these charges: no one really considers the REAL cost of processing the cards, only the actual PROCESSING FEE per transaction. There are a great many on-costs.

OK Dave, but a lot of those costs are really just part of the cost of running a business. As I said you are not charged for paying in cash, yet the business has had to install a safe, go to the bank daily/weekly or hire a security company to come and collect the takings, pay insurance based on the maximum amount they could hold over a holiday weekend, employ security staff, etc.

Running a business costs money, and when you buy something, you should not have to pay for the goods or service, then pay a booking fee, then an admin fee, then a card fee, then a fee to actually print a boarding pass if it is an airline, then a fee to use the loo… I’m surprised our favourite Irish airline hasn’t introduced a charge to use the steps to board the aircraft! After all steps have to be bought and maintained and someone employed to push it up to the aircraft.

Whether it is a cinema or airline, the price should be the whole inclusive price. If they choose to make themselves easier to do business with by accepting cards – especially if they are working over the internet – then that is a commercial decision they made. If they don’t think the cost of the cards is worth the extra business, then they should not accept cards!

Robert said “Whether it is a cinema or airline, the price should be the whole inclusive price.” – absolutely agree – the price displayed should be the price to pay.

My suspicion is, though, that if the on-costs of taking cards (which are, as Robert also said, part of running a business) were added to the prices before ticketing up, there would be outcry from those paying cash, who would be subsidising the card users even more than they are now.

Whilst I absolutely agree with Robert that the businesses have overheads, and card fees plus running costs of the machinery are part of those overheads, it is morally and commercially reprehensible that the banks profiteer from this in the way that they do.

Some of us are old enough to remember the 1990’s when Barclay’s connect was first introduced, and with it the first ever “PDQ” terminals: if the banks had not refused to guarantee Debit cards unless they were processed electronically (which is what happened when Connect first came out) retailers could have gone on using the “zip-zap” manual cards imprinters and vouchers. These were supplied FREE by the banks and the vouchers to go in them were also FREE. They did not use electricity or telephone connections and the cost of handling cards then was indeed just the processing charge. It is the banks who have driven this whole affair from day one and who are making the money out of it. It doesn’t matter which way we hide, disguise or wrap up the costs into the shelf edge price, the business overheads are still phenomenal now compared to what they were pre Barclay’s Connect because the banks have forced retailers into using this equipment out of which the banks make the money. It is therefore the BANKS who still need to be regulated and controlled in this as in all else that they do.

Dave, Having read your other posts, I do completely agree with you that the root of the problem is the way the banks are profiteering from card use. Probably it is becoming more of a problem now that they are being forced to stop selling PPI, ID theft protection etc. How else will they pay for the bonuses and generous pension schemes they have?

In 2009 a banker I met on holiday was bitterly complaining to me that he now had to start paying 3% towards his previously free pension since the credit crunch. I told him that several hundred people had lost their jobs in my company, and all the rest of us had to take a 10% pay cut. He then told me that because of the reduced volume of transactions/foreign exchanges/loans by industry (the sector he worked in) the bank had put up their fees in order to protect profits. He implied that my company should have just increased our prices! These guys live in a different world from the rest of us!

Absolutely agree with all of your last posting Robert!

I had a merchant account in Canada and in both the USA and Canada surcharges by merchants was absolutely banned, the merchant charges to me were a percentage of the transactions, the lower the transaction average the higher the percentage cost, however it never exceeded 5% of the transaction amount. It helped also to find a bank or credit union that gave a greater break to small businesses, does anyone know if, or how, the rest of the EU charges?

If you pay for a flight using a credit card, the company will have to pay the credit card company a significant amount of money, which varies according to size of business and what they have managed to negotiate with the credit card company. You benefit from free credit and if your payment is over £100, credit card payments offer protection in the event of a problem.

In contrast, debit card transactions are cheap. Which? gave a figure of 20 pence recently, so companies can reasonably be expected to absorb this charge in their prices.

My suggestion is to pay by credit card if there is no surcharge, or pay by debit card.

A debit card surcharge is unreasonable. A credit card surcharge is reasonable provided that it reflects the cost to the retailer.

The UNFAIRNESS continues and this must be eradicated.