‘Where do we stop?’: Expert slams shocking new surcharge trend
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Payment methods are something most of us take for granted—tap your card, hand over some cash, and you're done.
But what if you were charged extra no matter how you chose to pay?
One Australian restaurant has sparked debate after imposing a surcharge on both card and cash transactions, leaving customers questioning the fairness of these fees.
A restaurant along Victoria’s Great Ocean Road faced backlash after a traveller noticed an unusual surcharge policy.
Customers were charged an extra 3 per cent regardless of whether they paid with cash or card.
If dining on a weekend, patrons had to fork out an additional 10 per cent, while public holidays saw a staggering 20 per cent surcharge.
Professor Steve Worthington from Swinburne University slammed the cash surcharge, calling it ‘more than cheeky’ and ‘actually pretty poor performance.’
Unlike typical weekend or public holiday fees, a weekday surcharge for both cash and card raised ethical concerns about transparency in pricing.
Customers could only find out the true cost of their meal when it was time to pay, making it difficult to budget accurately.
Worthington argued that businesses should absorb these costs into their pricing, just like they do with electricity, water, and staff wages.
‘If you're surcharging for how we pay, why don't you surcharge for your electricity costs, or your water costs, or for your staff that you employ, where do we stop with surcharges?’ he said.
‘If we leave surcharging alone, people will start to take advantage of it, as evidenced here.’
The Reserve Bank of Australia had been investigating the surcharging landscape, with Worthington advocating for the removal of card payment fees altogether.
While acknowledging that it could lead to higher base prices, he believed it would create a ‘simpler system’ for consumers.
Under Australian law, businesses were only permitted to pass on the exact cost of accepting certain payment types, meaning excessive surcharges could be illegal.
For card payments, the standard cost ranged from 0.5 per cent to 2 per cent.
A 3 per cent charge was potentially unlawful under Australian Competition and Consumer Commission (ACCC) rules.
The ACCC stated that if there was no way to avoid a surcharge, the fee had to be included in the displayed price.
Additionally, businesses setting a uniform surcharge for all payment types could only charge up to the lowest applicable fee.
Despite this, cash payments were not exempt from surcharges, with the Australian Banking Association confirming that businesses must justify any additional fees.
‘Businesses must also be able to prove the costs they used to calculate the surcharge,’ it stated.
‘This ensures transparency and helps prevent excessive surcharging, which is illegal and can lead to significant fines and reputational damage.’
Worthington urged consumers to report unfair surcharges to the ACCC.
While cash had been an essential part of Australian commerce for decades, a report by the Boston Consulting Group highlighted its hidden costs.
Businesses incurred direct expenses such as fees from cash-in-transit services like Armaguard, as well as indirect costs related to theft, fraud, and human error.
Back-office costs, including cash register reconciliation and bank deposits, also added to the financial burden.
The report estimated that processing cash transactions cost businesses 3.9 per cent per sale, compared to 1.8 per cent for card payments and 5.3 per cent for buy now, pay later services.
As cash usage declined, some speculated that surcharges on physical money could become a widespread practice in the coming years.
Reserve Bank of Australia Governor Michele Bullock acknowledged the rising costs of maintaining cash availability and suggested it might only be around ‘probably for another 10 years.’
However, she stopped short of supporting a surcharge on cash, stating that it ‘would not go down well’ with consumers.
Barefoot Investor author Scott Pape believed a surcharge on cash payments was inevitable.
‘I do see a future where there is a surcharge on paying with cash,’ he wrote.
‘It’s always puzzled me why paying for something with cash doesn’t carry a surcharge like cards do.’
Pape argued that handling cash came with significant costs, from security concerns to transportation expenses.
‘Think of the shopkeepers who have to walk to a bank holding more money than a homie in a rap video,’ he said.
‘Or Armaguard, who have two pistol-packing blokes driving around in an armoured tank.’
Bullock acknowledged that cash access remained crucial for certain Australians and that a viable distribution system needed to be developed.
‘We've got to find a way of moving to a new system that means that distribution of cash can be undertaken and viable,’ she said.
In a previous story, experts predicted that Australians would move away from card surcharges and shift toward digital transactions by 2025.
With surcharges becoming a growing concern, many consumers may start seeking alternative payment methods to avoid extra fees.
Read more about how this shift could change the way Aussies pay.
With cash usage declining and surcharges on the rise, do you think paying with physical money will soon cost even more?
Let us know your thoughts in the comments.
But what if you were charged extra no matter how you chose to pay?
One Australian restaurant has sparked debate after imposing a surcharge on both card and cash transactions, leaving customers questioning the fairness of these fees.
A restaurant along Victoria’s Great Ocean Road faced backlash after a traveller noticed an unusual surcharge policy.
Customers were charged an extra 3 per cent regardless of whether they paid with cash or card.
If dining on a weekend, patrons had to fork out an additional 10 per cent, while public holidays saw a staggering 20 per cent surcharge.
Professor Steve Worthington from Swinburne University slammed the cash surcharge, calling it ‘more than cheeky’ and ‘actually pretty poor performance.’
Unlike typical weekend or public holiday fees, a weekday surcharge for both cash and card raised ethical concerns about transparency in pricing.
Customers could only find out the true cost of their meal when it was time to pay, making it difficult to budget accurately.
Worthington argued that businesses should absorb these costs into their pricing, just like they do with electricity, water, and staff wages.
‘If you're surcharging for how we pay, why don't you surcharge for your electricity costs, or your water costs, or for your staff that you employ, where do we stop with surcharges?’ he said.
‘If we leave surcharging alone, people will start to take advantage of it, as evidenced here.’
The Reserve Bank of Australia had been investigating the surcharging landscape, with Worthington advocating for the removal of card payment fees altogether.
While acknowledging that it could lead to higher base prices, he believed it would create a ‘simpler system’ for consumers.
Under Australian law, businesses were only permitted to pass on the exact cost of accepting certain payment types, meaning excessive surcharges could be illegal.
For card payments, the standard cost ranged from 0.5 per cent to 2 per cent.
A 3 per cent charge was potentially unlawful under Australian Competition and Consumer Commission (ACCC) rules.
The ACCC stated that if there was no way to avoid a surcharge, the fee had to be included in the displayed price.
Additionally, businesses setting a uniform surcharge for all payment types could only charge up to the lowest applicable fee.
Despite this, cash payments were not exempt from surcharges, with the Australian Banking Association confirming that businesses must justify any additional fees.
‘Businesses must also be able to prove the costs they used to calculate the surcharge,’ it stated.
‘This ensures transparency and helps prevent excessive surcharging, which is illegal and can lead to significant fines and reputational damage.’
Worthington urged consumers to report unfair surcharges to the ACCC.
While cash had been an essential part of Australian commerce for decades, a report by the Boston Consulting Group highlighted its hidden costs.
Businesses incurred direct expenses such as fees from cash-in-transit services like Armaguard, as well as indirect costs related to theft, fraud, and human error.
Back-office costs, including cash register reconciliation and bank deposits, also added to the financial burden.
The report estimated that processing cash transactions cost businesses 3.9 per cent per sale, compared to 1.8 per cent for card payments and 5.3 per cent for buy now, pay later services.
As cash usage declined, some speculated that surcharges on physical money could become a widespread practice in the coming years.
Reserve Bank of Australia Governor Michele Bullock acknowledged the rising costs of maintaining cash availability and suggested it might only be around ‘probably for another 10 years.’
However, she stopped short of supporting a surcharge on cash, stating that it ‘would not go down well’ with consumers.
Barefoot Investor author Scott Pape believed a surcharge on cash payments was inevitable.
‘I do see a future where there is a surcharge on paying with cash,’ he wrote.
‘It’s always puzzled me why paying for something with cash doesn’t carry a surcharge like cards do.’
Pape argued that handling cash came with significant costs, from security concerns to transportation expenses.
‘Think of the shopkeepers who have to walk to a bank holding more money than a homie in a rap video,’ he said.
‘Or Armaguard, who have two pistol-packing blokes driving around in an armoured tank.’
Bullock acknowledged that cash access remained crucial for certain Australians and that a viable distribution system needed to be developed.
‘We've got to find a way of moving to a new system that means that distribution of cash can be undertaken and viable,’ she said.
In a previous story, experts predicted that Australians would move away from card surcharges and shift toward digital transactions by 2025.
With surcharges becoming a growing concern, many consumers may start seeking alternative payment methods to avoid extra fees.
Read more about how this shift could change the way Aussies pay.
With cash usage declining and surcharges on the rise, do you think paying with physical money will soon cost even more?
Let us know your thoughts in the comments.
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