Gym operator Fitness First has been fined for applying surcharges on customer payments that exceeded its cost of payment card acceptance.
The Australian Competition and Consumer Commission issued an infringement notice and fined Fitness First $12,600 for the breach.
According to the infringement notice, Fitness First charged an excessive payment surcharge by imposing a 50 cent flat fee on a $46 fortnightly membership payment. This represented a 1.09 per cent charge, which was higher than the company’s cost of processing a MasterCard debit payment, which was 0.81 per cent.
The ACCC says a merchant can impose a flat fee surcharge but the surcharge amount must not exceed their cost of acceptance.
Meanwhile, comparison site finder.com.au has launched a service that alerts consumers to shops that don’t apply surcharges to card payments or require a minimum spend before they accept card payments.
Fee-Free Shops is an interactive online map that helps consumers locate shops that don’t apply surcharges. It has signed up 521 retailers since the launch last month.
According to finder, one in three Australians say they are not told that they will be charged extra when they use a card to make a purchase.
Surcharge fees are typically around 0.5 per cent for debit cards and up to 3 per cent for credit cards.
The ACCC’s enforcement action against Fitness First is the fourth time it has taken action against a merchant for excessive surcharging. It issued infringement notices to Red Balloon in November last year, Cruisin’ Motorhomes in July this year and Europcar, also in July this year.
A ban on excessive surcharging has been in place since 2016. A Reserve Bank surcharging standard limits surcharges to the merchants “average cost of acceptance for each payment scheme.” The cost of acceptance includes the merchant service fee for the particular card plus any other card related fees paid to the merchant’s acquirer or payments provider.
Other card related fees would include payment terminal rental and maintenance and any scheme fees passed on the by acquirer.
Finder.com.au will be hoping its new service will fare better than Surcharge Free, which was launched in 2016 with the support of the National Retail Association and American Express. Surcharge Free described itself as a “national movement urging businesses across the country to end the payment surcharge once and for all.” Its plan was to raise awareness of the positive impact for business of not surcharging and promote businesses that did not surcharge.
The Surcharge Free website has shut down.