Businesses are being urged to weigh up the costs of payment surcharges, as research suggests three-quarters of consumers actively dissuade peers from engaging with businesses using the practice.
A group of Australian business owners today joined forces to launch the Surcharge Free movement, which aims to remove payment surcharges altogether.
The move came as research conducted by American Express suggested that such surcharges are more harmful for a business than beneficial.
More than 90 per cent of Australians view a lack of surcharges as important to repeat business, 93 per cent of consumers would like surcharges removed altogether and 75 per cent admitted to telling people they know to avoid a business that surcharges, according to the research.
Groups and businesses supporting the Surcharge Free campaign include the National Retail Association (NRA), Retail Doctor Group and Hair and Beauty Australia, as well as retailers Coco Republic, Platinum Restaurant Group, Germanicos and THE ICONIC.
NRA CEO Ian Winterburn suggested that instead of using surcharges to make up for operating costs, business owners should consider incorporating any loss into the total cost of the product.
“Through Surcharge Free, we aim to turn the tide on this outdated, regressive, and harmful business practice once and for all. Brands need to provide Australians with the experiences they deserve to remain relevant and competitive in the current market,” said Mr Winterburn.
Coco Republic’s founder and chairman Paul Spon-Smith said he believes surcharging creates negativity among customers.
“For Coco Republic, our decision not to surcharge is part of the exceptional customer service we strive to deliver,” he said.
Organised by consumer advocate Christopher Zinn, Surcharge Free wants to show the benefits that avoiding surcharging can have for businesses.
The federal government identified excessive surcharges as a cause of concern for consumers, announcing in February that laws to cap the fees had been approved by Parliament. The date for the introduction of this cap is yet to be determined.
However, Mr Zinn believes more can be done.
“Some businesses may perceive this as permission for them to surcharge, as long as they don’t do it excessively, failing to realise the consequences introducing a surcharge will have on their business,” he said.
“Surcharge Free encourages businesses to focus on the bigger picture of the customer experience.”
He added: “The reality is the damage caused by imposing a surcharge can far exceed the costs associated with processing card payments.”