Card surcharge ban used as ‘cover’ for larger price increases by Australian businesses, experts say
Summary
Australian cafes and restaurants have increased their prices by more than the 1.5% credit card surcharge that was recently banned. Experts say businesses are using the surcharge ban as a reason to pass on larger cost increases caused by inflation, higher interest rates, and other expenses.Key Facts
- A ban on credit card surcharges, usually around 1.5%, started on October 1 to make fees clearer and reduce bank charges.
- Since the ban, 17% of cafes have raised coffee prices by an average of 50 cents, which is more than a 10% increase—much higher than the 1.5% surcharge they no longer charge.
- Rising costs for produce, rent, wages, and loan repayments are making it hard for cafes and restaurants to keep prices low.
- The Australian Competition and Consumer Commission (ACCC) warns businesses not to mislead customers by blaming price rises only on the surcharge ban if other reasons exist.
- The government is helping cover the cost of surcharge fees for tax payments until mid-2024 after problems with the Australian Taxation Office stopping credit card payments for tax.
- Consumer groups say it is normal for some price increases to happen but appreciate the surcharge ban because prices are now clearer to customers.
- Economists say strong customer demand and ongoing inflation help businesses raise prices beyond just the cost of removing surcharges.
- Interest rate rises in 2023 have increased costs for businesses who borrow money with variable loans.
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