The ‘experiences’ retailer paid penalties of $43,200 to the competition watchdog after being issued with four infringement notices about compliance breaches.
According to the Australian Competition and Consumer Commission (ACCC), RedBalloon charged four consumers excessive surcharges on various credit and debit card transactions between 31 March and 30 June 2017.
The ban came into force for large businesses in September 2016, and was extended to small businesses from 1 September this year. It prohibits commercial entities from profiting off merchant costs.
“Red Balloon was charging these customers more than allowed under the law prohibiting excessive payment surcharges on card transactions,” said ACCC deputy chair Dr Michael Schaper.
“[The legislation] provides that businesses can only pass on to customers what it costs to accept the payment, including fees such as merchant service fees, and terminal rental and maintenance fees.”
Dr Schaper added: “If a business wants to impose a payment surcharge on card transactions, that business is responsible for ascertaining the cost of acceptance of the payment before imposing the surcharge onto customers.”
The government has issued a warning to all businesses that it will be cracking down on the practice over the Christmas shopping season, and noted that while RedBalloon is one of the first companies stung under the new law, more penalties are imminent.
“If a business is unsure what the cost of acceptance is for a particular payment method, it should contact its financial institution to obtain a copy of its annual statement,” concluded Dr Schaper.