Card surcharges are changing in Australia - here’s what hospo needs to know

Card surcharges are going away

From 1 October, Visa, Mastercard, eftpos and American Express are introducing rules that mean businesses can no longer add a surcharge because a customer chooses to pay using one of their cards.

So if you currently add a surcharge amount at the EFTPOS terminal to cover your card processing costs, that’s the bit that’s changing.

Unfortunately, there’s a small catch.

Your card processing costs haven’t disappeared.

You’ll still pay fees to accept card payments. You just won’t be able to pass those costs directly on as a 'card surcharge'.

The Reserve Bank is also making changes designed to bring card payment costs down, but businesses will still have costs associated with accepting cards.

So what do you do?

It might be time to review your prices

If card surcharges have been helping cover your payment costs, it’s worth looking at what removing them means for your margins.

For some venues, that might mean absorbing the cost. For others, it might mean reviewing menu prices so those costs are built into what you charge rather than appearing as an extra fee at the till.

We’re not going to tell you what a flat white should cost - that’s your call.

But if you decide your prices do need a tweak, you definitely shouldn’t have to open every single menu item and change them one by one.

In your Bustle Hub, you can use the Bulk Item Updater to update prices across your menu much faster.

A small mercy in a world of payment regulation.

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What about weekend and public holiday surcharges?

Good news - they’re not going anywhere.

The changes specifically relate to surcharges based on the way somebody pays. They don’t remove hospitality surcharges for weekends or public holidays.

That means the surcharge feature in Bustle can still be used for things like:

• Saturday or Sunday surcharges
• Public holiday surcharges
• Other clearly named hospitality surcharges
  

And because you name your surcharge in Bustle, your customers can see what they’re paying for on their receipt.

What we wouldn’t recommend is taking your old card surcharge and simply giving it a shiny new name. A weekend surcharge should genuinely be a weekend surcharge - not a card fee wearing a fake moustache.

What should you do before 1 October?

First, talk to your payment provider.

If your card surcharge is being added by your EFTPOS terminal or payment setup, they’re the best people to confirm exactly what will change and whether anything needs updating.

Then have a look at your numbers.

How much are card payments currently costing you? How much are you recovering through surcharges? And what does losing that recovery mean across a week, month or year?

Once you know that, you can make a sensible decision about whether your pricing needs to change.

And if it does, Bustle’s Bulk Item Updater can help you get those menu changes done without making a meal of it.

Running a hospitality business already comes with enough moving parts.

When something like this changes, our job is to help make the next step a little easier.