Card surcharges face super-complaint Consumer lobby group Which? is making a so called super-complaint about the extra money charged to consumers who pay by card. Which? will push the Office of Fair Trading to investigate companies charging far more than they have to pay to process card payments. Ryanair is infamous for gouging customers in this way. Which? …
According to the BBC's coverage of this story, the card issues are supporting Which, not the retailers. There's a very simple solution to this, the card issuers could make it part of their T&Cs with retailers that they do not charge excessive surcharges. It's not as though they don't already impose a raft of rules and regulations, so one more isn't going to make much of a difference. This appears to be pure hypocrisy on the part of the card issuer's simply so they can look like the good guys.
AFAIK, in the US the card issuers can revoke a retailer's use of the service if they demand ID when making a purchase. A similar rule here for excessive surcharges would be the obvious solution.
. . . is percisely what *should* happen. Your business model shouldn't be based on adding on innumerable "fees", that are hidden until you get to the "insert card details" page.
As another poster has said, the price differential between the cheap airlines and the likes of BA, KLM, AA etc is tiny, once you factor everything else into it, which would be why I never fly on the lying bastards Irish airline and only on Easyjet if there is no other option.
I think the guy is a despicable detestable prick of a man but, whilst he's been able to get away with it, he's been doing great business with the unwashed masses and making a stack of cash. A successful if distasteful business plan indeed. The reality unfortunately is that most successful business people are utterly ruthless bastards.
... as long as they make it clear what the price is going to be at the preliminary "looking" stage, not at the end.
I really don't like Ryanair, and will not use them for anything, but they are not he only airline doing this - Jet2 (booked by my wife, not me) have just charged us £4 each for printing our boarding cards. Yes, you read that correctly - I've been charged for using my own printer, ink and electricity! Bastards.
Fir those of you saying "fly with flag carriers", that isn't so easy for those of us that live outside London. Either there is a huge expense in travel to the airport by other means, or we need to catch a connecting flight. If it is a connecting flight operated by the airline, then you are paying for a 50% higher chance of having your luggage lost (based on my experience). I'll stick with BMIbaby, thanks!
Legal Tender is purely a "legal" term for repaying debt (legal tender cannot be refused when repaying a debt), goods and services are not "a debt" and as such they can refuse or accept whatever payment they like if it's a condition of sale (many places no longer accept cheques), Scottish notes are not legal tender (not even in Scotland), merely a promissory note. 20p in copper is the limit for legal tender, however, any number of pound coins are legal tender, but if you tried to pay £600 in pound coins for a flight they *dont* have to accept it, legal tender or not is irrelevant for goods and services. That said, food has a funny legal status (if you pay after consumption) if you have a meal in England and try to pay with a Scottish note don't let them fob you off with "it's not legal tender", you're making a genuine effort to pay, it's as legal as a cheque, credit card etc. if they don't accept it then you're within your rights to leave (although, if you do so without leaving your details there is an issue).
IANAL, but at Uni when they introduced the new, smaller £10 note, Group 4 started charging extra for taking the older bigger ones (people said it was because they over-powered the guards; Group 4 were loosing lots of prisoners at the time!). The uni bars then started refusing the older but still legal tender notes.
The law students came out with the legal tender issue and said that if you offered legal tender to pay for the drinks and the bar refused the money, then you have performed your part of the contract of sale, and you can get your drinks for nothing. I remember that this spread around campus in no time, and then the bars accepted the old notes again.
Of course I've no idea what the law actually says, but it was funny at the time.
"Of course I've no idea what the law actually says, but it was funny at the time."
Presumably the law students failed their exams.
Firstly because a bank note does not strictly count as money - it is in effect a cheque drawn on the Bank of England, what it actually says is that the Bank will pay anybody the face value of the note if they present it at the bank. In other words a bank note can be exchanged for real money.
Secondly, as has already been pointed out, that law of payment only counts for debts so anything paid for in advance isn't covered. A meal which you have already eaten would count, it is something for which you are effectively invoiced for after delivery. IOW you run up a debt and then pay it off. Drinks at a bar are not the same. You must usually pay for them before you can drink them. I have heard the argument that if you were to pick up the drink and drink it before paying that the "legal tender" reference would apply. I do not believe that it would. To do so could probably be considered theft and offering to pay for something after you have stolen it doesn't usually butter many parsnips. If, however, you ran up a tab then that particular law would apply. I can't remember the last time I drank in a student bar that offered that particular service.
Concerning the exchange of bank notes for "real" money (in England and Wales):
"... the value of the pound has not been linked to gold for many years, so the meaning of the promise to pay has changed. Exchange into gold is no longer possible and Bank of England notes can only be exchanged for other Bank of England notes of the same face value." [From the Bank of England's FAQ]
So if the definition of "real" money is what the Bank of England gives you if you offer a note for exchange, then that would be, er, a bank note of the same face value that was presented for exchange.
The only time this exchange is useful is when you find a stash of notes of a very old "withdrawn" design that a regular bank refuses to exchange. (But in such cases you may find the "real" value to a collector is higher than the face value.)
How do you pay cash for a ticket that can only be bought online? Kind of difficult I would have thought.
You can't pay at check in for two reasons; You have to buy your ticket in advance; and the budget airlines are closing all their check in desks so you have to check in online.
Even if you could find a way to pay cash they could still add a surcharge for cash payment. There is nothing in law that says they can't. All the law has to say on the subject is that one method of payment has to be free, otherwise it's not a surcharge. The usual method is to pick a single pre-pay mastercard brand as the payment method they don't charge for.
It's not just card charges; people like BT introduced charges ostensibly for people who pay by cheque, claiming it costs more to process payments. But what they really do is penalise anyone who won't pay by direct debit.
I'm pretty certain that it costs BT next to nothing to receive a BACS payment that I send via internet banking, but they still charge me the same few quid as if I were paying by cheque. And, given their alarming incompetence when it comes to creating accurate bills, I've never been willing to let them have a direct debit. (BT ISDN2e provides, it seemed to me, a dazzling array of options, each of which could be billed incorrectly; and the merest enquiry about calling plans could get you slapped onto something with a committed call spend hundreds of quid higher than you'd ever made in the past)
Companies should not be allowed to penalise people unfairly for ANY particular payment method, not just credit cards.
Effectively, BT and other companies use surcharges to increase basic fees for those who don't trust them enough to pay by direct debit.
Is just as much of a pain in the ar** as a cheque. They need manual posting and allocation, and are far more likely to not be paid than a DD which is automaticly posted to the correct account. There is a husge work cost with both cheques and bacs which is not there with an automated payment.
Then the answer is to have a system like Australia's BPAY system whereby you have a biller code and reference number. Allocation is therefore automated as they gave you the two numbers in the first place. I always remember paying my bills via bill payment on my HSBC online account required a reference number with an input mask - I would seriously doubt that involves manual allocation on account of the human error factor.
All compulsory fees must be listed up front, so if they have an unavoidable £20 admin charge it must be listed in advertising.
The reason Ryanair can get away with not listing their crazy card fee in the headline price is because they claim that it is optional as they offer one fee free means to pay. In their case it's the Prepaid Mastercard - it's the card their research shows you're least likely to have.
Even though it costs the same to process as a regular Mastercard they artificially restricted themselves to the pre-par variety to force most people to have to pay up.
Last time I checked, the card that BastardAir do not charge you for is only available from BastardAir. And they charge you £75 for it.
As a frequent BastardAir flyer (not through choice, I hasten to add) I did look into it and figured that even as a regular it wasn't worth getting the prepaid card.
(Thanks to all the add-ons BastardAir pile on, I now fly Aer Lingus - usually an extra fiver each way but worth it for the lack of stress and decent customer service.)
The charge pays for the online booking system as a whole!
So they want you to pay a charge to use the only means of booking they offer! Its a scam. has been for years.
The only issue is that Airlines and travel companies do often pay a slightly higher percentage than other retailers due to the increased charge back risk, but by slighly higher I mean 0.1 or 0.2% more.
On debit cards they are probably as low as 10p per transaction for high volume stuff.
If you want our money set your prices according to your business cost rather than adding them in at the end!
I'm not understanding the downvotes? I was only pointing out that back-end systems cost to operate and that the cost of a transaction to a company is higher than the charge for the transaction from the payment processor.
I wasn't defending the charges in any way, just suggesting that it's not unreasonable for them to be more than the cost of the charge from the processor.
Is that often companies imposing these charges state that some or all of the charge is levied by a company in the Channel Islands (or similar) and so they dont have to pay so much tax on that part of it. Used to be detailed in tiny print on Tesco receipts, but I've not checked this recently.
...as credit cards have much more consumer protection, particularly when it comes to things like chargebacks.
Performing a charge back is a powerful weapon against retailers and they don't like it being used. So they've cottoned onto the fact that if the charges for a credit card are significantly more than a debit card (less protection) then people are more likely to pay by debit card.
simples
its also about gouging additional fees over and above the headline price.
The deal they have with the merchant acquirer will take into account the chargeback risk, and most chargebacks fail for the simple reason that if they get you from A to B they have fulfileld the terms of the contract, however late or bad they where.
Additionally the ATOL and other bonding schemes lower the risk to the merchant acquirers as well.
Many of the "low cost" airlines charge the same fee for debit or credit card, that in itself is wrong.
It is also in most t's and c's for merchants that they cant over inflate and pass on charges, hence why the airlines are moving to call it an admin fee.
Both debit cards and credit cards offer charge back (http://www.which.co.uk/consumer-rights/sale-of-goods/your-rights-when-paying-by-credit-card/chargeback-on-credit-and-debit-cards/).
Credit card purchases, where the item purchased is between £100 and £30,000 (regardless of the amount paid by credit card), offer, in addition, joint liability (the CC company is 'jointly and severally liable' under section 75 of the Consumer Credit Act).
Either way, these additional protections are only relevant if the retailer screws up and refuses to deal with it so why should they result in an increased cost to the consumer?
It's perfectly within the law (and a good thing too) to claim a chargeback if there is a dispute between customer and company. However, you may well end up in court on fraud charges if you take a company's service and then claim a chargeback after the event. That is, if you can't show that the service was in some way not what you paid for.
Ryanair do provide an alternative and one of which I've availed myself. They used to offer free payment on Visa Electron, so I applied for a Halifax account that had a Visa electron Card. Then they switched to Prepay Mastercard, so I got one of those. If you are willing to travel light with Hand luggage, don't buy any of the useless crap they offer as optionals, grab a pre-pay card and book early enough then you can get very cheap flights. My wife and I travelled to East Midlands from Belfast and back for £12 in total. Then the fuckers stopped flying from Belfast so now I have to use another instead.
That said, the CC & DC fees are stupidly high & extortionate, and people really shouldn't have to jump through hoops with getting different cards and it's a prctise that needs to stop. It's also a practise that will be swiftly replaced by another money making scheme like charging extra for a window seat or charging for hand baggage should it be stopped.
It's not just card payments. Most of the budget airlines charge for almost every form of payment. The trick is that they can surcharge as long as one method of payment is exempt. I think this regulation was drawn up with the idea that "one form of payment" would mean a single type of payment (e.g. cash, card or cheque) the airlines however take it to mean one particular card. So on most airlines one particular brand of pre-pay credit card is exempt from charges.
I don't have a problem with all the budget airlines' excess charges. For example baggage excess if fine by me as long as it's clearly advertised. What I do have a problem with is "excess" charges that aren't optional. How about £10 to check in at the air port or £5 online? Since there's no other alternative £5 of that is compulsory and as such ought to be added to the ticket price.
I'd have a lot more time for their whining about taxes and the like if they weren't so underhand about their own charges. How about we let them continue to advertise their silly prices, but force them to include in nice big type a figure for "average total cost per passenger"?
If people want the convenience of paying by credit/debit card they should be able to do so and merchants should be permitted to pass ONLY the ACTUAL COSTS on to the user. In some jurisdictions Mastercard, Visa (and Uncle Tom Cobley) write in to their contracts that no price differential between card users and cash payers is permitted which means that cash people get short-changed.
Cards have real drawbacks. An error by a bank (Hello, HSBC) can deprive a debit (or credit) card user to accessing their account even though in good standing. The FBI (and Plod) can receive real time reports on card usage (this is achieved by lowering the credit limit to zero for the card requiring phone approval every time)..
'Authorities' can gain access for all manner of 'reasons' be they unrelated criminal matters, tax related matters or any point in time or physical place.
Lawyers acting in civil matters can also, with court orders, access data. Might be embarrassing in divorce matters. Use a card for a flight and your data will go viral to every country on your itinerary; the data will be held on GDS all with computers in the U.S. which under 'The Patriot Act' (sic) can be accessed without warrant.
The card companies use your usage data for all manner of purposes including onward selling of data.
Of course not everything is bad with cards: you don't need cash and you can 'stop payment'.
Cash can't be traced; leaves no 'bit' trail, honoured by most vendors and is great for avoiding tax!
Ryanair had to drop all kinds of charges pretty sharpish in Germany as they were deemed to be unfair (the no-charge option is essentially not available in Germany), illegal (you cannot charge multiple times for the same service - one credit card debit cannot incur multiple charges) and anti-competitive (headline prices must include all charges). It's not a coincidence that growth in Germany is sluggish at best.
Interestingly other airlines offer considerable discounts if you do not pay by credit card (at least €10 with Lufthansa) and it's not uncommon to get a 5% rebate in smaller shops if you pay with cash or debit card.
Ryanair is the pennypincher's airline and as long are people prepared to be repeatedly suckered by its misleading offerings they will succeed.
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