I'm sure that I'm old enough to remember a time
When it was specifically *illegal* to make a surcharge for a credit/debit card payment on any transaction... maybe it's just my old brain having a slosh around.
It's hard to justify a transaction cost for what is basically an overhead to do business, and impossible to justify $UNPLEASANT_AIRLINE$'s policy of charging for each passenger and each flight as separate transactions, in spite of a single transaction to the card supplier being made.
Not exactly illegal
It was never "illegal" to make a charge for credit card payments. However, the credit card companies used to have a clause in their contracts with retailers which forbade them to raise such surcharges. It was these contact clauses which were, in time, deemed to be illegal in the formal sense of the word (quite possibly because of EU or domestic competition rules). This has been the position for many years.
I can see some justification for not making debit card payers (fixed 20p charge from the card operator) and cash payers subsidise credit card sales (usually about 2% of the value), but it should not exceed the actual costs.
Note that credit card users do gain some benefits - their payments are essentially insured against the failure of the supplier, not to mention a 1-2 month credit period.
It wasn't illegal, it was the credit card issuers that did not allow the fees. They would revoke charging privileges of businesses that added the cost of running the card to a purchase.
I've no problem with compaies making it explicitly clear what the surcharge is, and charging it, so long as it is limited to what their processing fees actually are. Ryanair charging £8 for a £1.50 transaction (or whatever) is just plain (plane!) wrong.
plus the fact that there *IS* a handling charge for credit cards (about £5 for a few hundred pounds) and a debit card (about 30p)
I too dont mind paying said handling fee as long as it is transparent.
Not the only ones...
Could we add ticket booking agencies to the list of those adding unwarranted charges? They also do it more than once by adding in a "booking fee" and a "transaction fee" which can easily add 20% to the price of a ticket...
Shoot the airline firms down in flames...
And then can someone please take a clue-bat to event-ticket companies? F'instance, I recently ordered a set of tickets for a show in Manchester, and was presented with three "delivery" options:
1) First class post: £3.25 (i.e. ticket + envelope + stamp + packing)
2) Collect at venue: £3.25 (i.e. ticket + an extra task for the bouncers on the door)
3) Self-print: £3.25 (i.e. nothing other than a few electrons and a handful of bytes in a database)
Now, to my admittedly simple mind, 3) should be cheaper than 2), which in turn should be cheaper than 1). But the Master of Tickets has decided to pass none of these savings onto the consumer.
So naturally, I either opt for 1) or try to buy tickets directly from the venue/local music-shop: if I have to pay a surcharge, I'd rather give it to the local community...
Same goes for online booking fees
Not only do they require another £6 to pay by credit card (each way, £12 for a return flight, per person), but RYA, to name the most famous if not the worst, also have a £6 web check in fee, also for each leg of a flight, also for each person
So while everybody knows that they WILL screw you, one way or another, it still grates that the cost of the online transaction - you even supply your own paper & ink to print the boarding passes - is frequently more than the cost of one of the flights, itself.
The watchdog (so named because all it does is watch) has been aware of this for many, many years and occasionally growls: much to the hilarity of the low-price airliines who either pee on it or just ignore it completely. But it never actually gets off it's ass (a watch-donkey?) to do anything. Maybe we need to worry less about the costs - which are made known before you pay - and give the OFT a good kicking, instead?
Imagine if Tesco did this.
"That'll be £19.95 please."
"Good, here's £20"
"Sorry sir but we require a £5 till opening charge for cash purchases."
"Cheap Flights For 50p ! :-)"
Haven't laughed so hard for quite a while - awesome!
On topic: nothing worse than saving cinemas the inconvenience and cost of my physical body occupying their lobbies, queues, telephone system only to be charged an additional 5% minimum even when paying with a debit card!
As the ladies said, the fecking cheek of it all...!
Good old Ryanair
Ryanair look for the most obscure hard to come by credit card to offer "free" through their booking system simply so they can pretend their flights really are 99p each way or whatever. I recall Ryanair once saying that Visa Electron cards were free at a time when there wasn't a single card provider in Ireland for people wishing to avail of it.
Then of course Visa Electron becomes a little too popular for their purposes so they switch to Mastercard prepaid cards, presumably realising that prepaid cards come with their own fees and limitations that discourage their use.
The reality therefore it is a compulsory fee in all but name and one they are obviously profiting from. If a flight costs €50 (for example) then the credit card transaction is likely to be €1. It's a con job.
debit charges are practically free but credit charges have gone up in the past few years.
Credit card fees
Visa's credit card (interchange) fees are less than 2% in Europe. It shouldn't cost more than a couple of euros on the average Ryanair flight, often less even if Ryanair rounded up by 0.5%. Worse is they charge €5 per person per leg they are compounding the con. A family of 4 gets whacked with a €40 fee when the total credit card fee might only be €4.50.
An outfit with which I shall never fly - I'd rather walk and swim to my destination - charge this fee* PER PERSON, which really is double- or quadruple-dipping. Michael O'Sweary has proven that you can build up a successful business by treating your customers with contempt, so I blame the customers for lying back and taking it. Last time I flew short-haul, British Airways (not a paragon of customer care themselves, but a darn sight better than Ryanair) came out as the same price as the budget airlines after adding all the silly charges.
*actually, it can be avoided if you have an obscure type of card owned by a miniscule percentage of the population, just so they can claim it's avoidable..
...everyone knows what they are getting into when flying Ryanair - they are evil but make no pretense to the contrary. They probably just get staff to wipe their bums with complaint letters and then send them back without a stamp on.
Jet2 have virtually the same unavoidable charges ...
... but at least their planes look as if they will complete the flight! As a bonus, when I flew with them earlier this year, the plane had a lot of legroom even in the standard seats, because they have done away with reclining seat backs ...
Why pick on travel companies...
I recently wasted some time on the phone to a Swinton Insurance minion who sold me House Insurance (at a good price). Then when I was getting ready to give hime a credit card number he just mentioned in passing that there would be a 2% surcharge for a credit card. I told him to stuff it and went elsewhere.
Good. Now what about Direct Debit?
I hate firms trying to strong-arm people into these little extra charges. Now can they do anything about these non-direct debit charges. No, I don't want to give companies the right to take whatever they want, whenever they want from my bank account, thankyouverymuch. And I resent being told that not allowing them to do so is a privilege that I have to pay extra for.
DD are free, other methods are not as they have liability to the card issuers hence a charge from the card issuers as an "insurance". It wouldnt be fair for other customers to swallow your charges for preference of payment.
Perhaps I should have been clearer. I don't normally pay my utilities bills by credit card. I'm comparing the Direct Debit charge to when I transfer it directly via online banking or hand over money at a PayPoint. The Direct Debit "discount" is used as an incentive not because it saves them charges, but because it lets them directly just get the money without all the worries of people paying when its more convenient for them, disagreeing with amounts, etcetera.
It's usually spun the other way around
People willing to use DD normally get a discount which is absolutely fair - why should those customers be subsidising the other customers who wish to use a payment method that costs the company money?
"I don't want to give companies the right to take whatever they want, whenever they want from my bank account"
You really don't understand the DD system then..
You really don't understand the DD system. I was there when it was invented, there when it was revamped after torrents of customer complaint and there again when the banks did their best to avoid OFT criticisms of the system. The Dd system was introduced at the request (more like command) of large manufacturers and distributors who wanted to make sure they were paid for supplies by retail outlets. They wanted to debit the little chap's bank account at the same time (often before ) he got his goods. Insurance companies saw it as a good way of collecting premiums, and companies with annual fees (eg National Trust) realised they could crank fees up gradually and most members would not cancel their subscriptions.
As time went by the thorny issue of "what to do when things went wrong" came up and the banks had to issue the "Direct Debit Guarantee" which appears to say that if you have been wrongly debited you are entitled to an instant refund of your money. In practice banks are extremely reluctant to refund money debited where the debit is subsequently disputed. To this day they have considerable costs in this area, because if a DD is disputed it can take a lot of bank time to resolve the problem.
The joke is that there is no need for DDs at all. They are a "pull" system (the money is sucked out of the payer's account by the payee). Standing Orders are a pull system (the payee commands his bank to pay the bill regularly) and online payment allows the payment of bills as and when the payee requires. All three systems are fully automated. whenever required to ay by Dd I always meekly sign the authorisation, cancel it as soon as one payment has been made (as my bank statement then shows me where the money went) and set up a standing order instead. The payment processing costs for the recipient are effectively the same in all circumstances and, the cash flow should not be affected.
A note to the author of the article. lines are toed, not towed, unless airplanes are pulling signs behind them, in which case they may be towed.
Tow the line...
Yes the days of yore weren't good. So what? I'm not using the DD system of yesteryear, I'm using today's. Banks generally are reluctant to refund instantly, but they will. So what's the problem? Complaining about how it previously worked is like refusing to fly in case the hydrogen filled balloon supporting you catches fire.
SO's are a "push" system I suspect you meant to say, but they don't do automated variable amounts, same as online payments. The reason DD's are cheaper is because there is less hassle for the company, and less hassle means less staff required. If I'm willing to accept the drawbacks that you believe exist, then I should share in the company's financial gain from using it.
The card surcharges are very annoying.
Though what's more annoying is that Sleazyjet no longer appear to offer a method of payment which doesn't attract a surcharge... cheque or bank transfer. Or I couldn't see it when I last booked with them. The only way to pay without a surcharge is by Visa Electron or by signing up for their pre-paid Mastercard, no thanks! I bank with Barclays and my debit card used to be Electron but that was replaced a few years ago unfortunately.
I don't think most people mind additional charges - it's just that the payment processing charges are always insanely marked up on what it actually costs to process the payment!
For the volume of payments they must process charging an equivalent of 12% to handle a credit card is ridiculous. We're only charged 3% with our Worldpay merchant account!
Make airlines quote price for what the public expect on a flight
example flight and taxes; with 20kg lugagge allowance, 8kg carry on bag, paid for by credit card.
They can then feel free to reduce the prices for competative purposes
example -£10 for no hold baggage, -£6.00 for paying by debit card etc
Do not let this go!
On the other side of the pond, hidden fees are the rule, not the exception. Do not let this happen to you!
E.g. if you buy a $20 plan for your cell phone, you find out eventually that with "monthly connection charge", "emergency phone numbers charge", "just-because-we-can charge", and sales taxes, you will actually pay $40.
Ryanair firefox only...?
Slightly off topic. My father-in-law had trouble last weekend with "a duplicate booking" and called a Ryanair telephone automaton/customer service agent. I listened in the background and prompted him to ask questions, eventually the agent eventually stated that their "website only supported Firefox and may not work properly on IE". Most amusing.
No it's Ryanair's fault
They don't get out of it that easy. If their system is double booking because people are hitting reload / back / order then their website is broken. It isn't hard to generate a unique invisible form value that gets submitted with the request so that dupes can be rejected. Nor is it impossible to reject bookings if the same passengers get booked on the same flight with the same details in some space of time.
And don't get me started with BT
Sorry - too late!
BT sends me a bill each quarter. I open it, peruse it, take a walk to the post office to pay it.
At the post Office, the man says "you do realise that BT will charge you an extra £6 for paying this here don't you?"
So I go to my bank and pay it there. "Sorry. You'll have to go to the Post Office. BT makes a charge if you pay it here."
So I go home and log on. BT says pay your bill by direct debit OR ELSE.
Surely what they are doing is illegal. When I challenged BT they said that 'It was standard industry practice to charge this fee"
Seeing that they ARE the industry they are effectively making it up.
What would happen if I refused to pay the charge - sorry, penalty?
thats an easy one
you'd probably get cut off, be taken to court and have a CCJ thus rendering any decent loans/mortgages impossible.
But eventually you will be in some form of trouble, either CCJ for non payment or having your service ceased (or Both).
I know it's wrong, it really is terrible but if I recall they (BT) slipped a load of contract "variations" in over the past few years.
So, you either pay the surcharge for not having a DD set up or you take the chance that eventually BT will cease your service and take you to CC for non payment of your bills.
Wrong, but (almost certainly) true!
As I understand it, every telephone company apart from BT was charging for non-DD payments. BT talked to Oftel or Ofcom or whatever they're called to try and change that and nothing could be done so they copied the others - on the basis that they were charging less than all the other telephone companies for providing a payment option that was costing them more. I think the 'discount' is less than all the other telcos so paying by cash is still cheaper with BT than any other telco.
(This knowledge is the result of a long and painful process with my dad who thinks of DD as some kind of outrageous organised theft. Half the telcos won't accept any form of payment that isn't DD, the others charge more than BT for paying by any other method. He stayed with BT in the end as moving would have cost him more - he doesn't use the phone much so the non-DD fee makes up a big part of his bill).
how can it be legal to charge a surcharge for using cash ? My mom bought some tickets on line . They charged her $1 printing charge. But here is some thing even more fun. Buying your tickets in advance to save $5 (instead of buy them at the door the day of). If you buy them online its $3 surcharge plus a $1.5 printing fee. Seriously ticket places are charging a printing fee when you are the one printing the tickets your self. The bastards should be forced to watch a Charro Gilbert Godfrey sex DVD followed by a Margret thatcher Janet reno lesbian porn DVD.
While we're at it...
How about Amazon and delivery charges?
You actually have to give your card details BEFORE they tell you the delivery cost.
Amazon offers free delivery on everything. Everything. And 3rd party merchants have to disclose the delivery charges on the product page. And whilst you do have to enter the card details before you find out how much delivery will cost, you then have to confirm the transaction...
I seem to remember ...
... a £2.50 surcharge when I bought my car tax online.
a £10 credit card fee renormalisation fee.
Got another one!
This little thread just reminded me that I need a ticket for Judas Priest (hey, it's their last-ever world tour [*]). A quick search for an alternative to Ticketmaster threw up the following:
Ticket face value: £36.00
Booking fee: £4.50
Transaction fee: £5.25
(optional) "cancellation" insurance: £1.50
Total: £45.75 - or £47.25 if you opt for the insurance.
In other words, the surcharge is 27% of the ticket's face value (31% with the insurance)! And I'd love to know what the difference between a "booking" fee and a "transaction" fee is....
And interestingly, despite the fact that processing fees shouldn't be affected by the price of the ticket (same paper, same ink, same database, same stamps, same human resource), a quick look at cheaper tickets shows that the booking and transaction fees were significantly lower:
Ticket face value: £27.50
Booking fee: £2.75
Transaction fee: £2.00
In other words, the "fees" for this ticket are 4.75, or roughly 17.5% of the ticket's face value, rather than the 27% for the JP ticket.
[*] may be subject to change, if a band member needs a new Ferrari. To be fair, JP have been going for over 40 years and haven't got a history of claiming to be retired, so it's more likely to be true than with certain other comeback-kings...
Ahh the old 1-2,..... 3-4-5-6-...
I calls all those "budget" airlines together under the category "Conair".
If traveling for business I will search for an alternative rather than use any of them.
For personal travel I would rather drive for 8hrs than sit in a Conair cabin for 2hr.
However, we are to blame. Yes that includes YOU!
The British have developed the culture of the "Bargain".
What this means is that something is sold for £100 for 2 days and then "discounted" to £50.
Womens shoe shops and most furniture retailers are masters of this kind of con.
In reality, if you pay cheap, you get cheap.
So, if you want less hassle, less chance of getting ripped off, and a decent product, then always avoid the cheapest item. It's usually cheap because it's crap!
I fly AirBerlin and am impressed with no-fuss websites, no add-ons, useful flights, clean aircraft and mostly punctual flights.
Best value? Definately.
Paris because she NEVER shops at "bargain" shoe shops!
Seriously time to put of a few of these companies out of business, especially airlines. Most of them have forgotten who bailed them out when fuel costs were high and who pays their wages. Customer service these days is a joke, which is especially hard to take after they tack on fees to the cost of a ticket for things like choosing to take a suitcase with you. If you can pack everything you need into a carry-on good for you, but most people who go on holiday/vacation need more than one change of underwear.
That should concern the tourist industries of most countries. A lot of people are not spending nearly as much money on grockle tat (souvenirs) when they get to their destination because they're being hit for additional fees every step of the way. Whether it's a surcharge for paying with a card, fraudulent homeland security tax addons or being stiffed for food and entertainment on the flight, it's costing you $60-$100 per person. If you can cut that figure by $20, you're going to, especially if you're already paying for 4 or more plane tickets.
I don't mind paying the real cost of a ticket, fuel has gone up for everyone, there are fees that have to be met. But pick a fucking way of charging me for it, and do so honestly. Not with sneaky charges and then fucking me over by telling me I need to pay for a fucking bag. If airlines can't operate honestly, we're better off having them replaced by businesses that can.
Gratuitous plug for Monarch, who don't try to rip you off by charging for your debit card. Noconnection except as a satisfied customer.
30p per debit card
I worked at a small insurance brokers. The total money going through the machine per day was about 5 grand. So not exactly a huge user who benefits from great rates. But even still, we only paid a set fee of 30p per debit card transaction and ~1.3% on credit cards (except AMEX which had a separate higher rate).
So with the volume that these airlines are putting through, they must be paying next to nothing!
i'd F(lie) on that
Even with the handling fees...
What pisses me off
Is with the withdrawal of cheques etc (not a bad thing) we are now forced to pay for items with either a debit card or a credit card for purchases on-line.
Paying for items via a debit card should attract no fee whatsoever because you usually have no other bloody option.
I avoid any company which imposes essentially penalties for daring to pay by debit card.
Here in NL hardly anyone uses credit cards. We haven't had cheques since the 1960's. Eurocheques were abolished when the euro was introduced.
Nearly everyone uses debit cards with PIN. Hardly any costs for the receiver of payments. When you have something delivered you can pay by using a mobile PIN machine. This means that the delivery people don't have any cash on them which is much safer.
For online transactions we use the iDeal system, which has only one disadvantage: there is no chargeback option. But the system is free for consumers and incredibly cheap for merchants.
I was able to use IDEAL when I booked a ferry crossing with Norfolkline. No charges.
My partner booked a flight with KLM and there were no charges with IDEAL.
It seems consumers and merchants are being ripped off by the financial service suppliers in the UK. I have seen quite a few examples of merchants charging extra for paying by card (either credit or debit) due to 'incurring costs'. This is ludicrous because handing in cash to a bank also incurs charges. Rip off Britain at it's worst.
I really don't understand why charges incur when you use a debit card in the UK. It is a safe and direct transaction. Here in NL most banks charge about 0,01 euro per transaction and they will charge about 800 euro per annum for a PIN terminal, including ADSL line for the processing.
The whole financial system in the UK could do with an overhaul to bring it into the 21st century. Using cheques is ridiculously expensive and there are many more modern systems available.
Going into administration. . .
Drip-price rip-off has gotten worse since online comparison sites have come to the fore, something we noticed a couple of years back with -- of all things -- travel insurance. We'd been with UK-based Flexicover Travel Insurance in the past and decided to check 'em on a comparator before giving them our custom again. Turned out, they came top for value. . . by a couple of quid. However:
On the last page of the online quote, that couple of quid price advantage suddenly vanished: Flexicover wished to charge that amount for "administration".
We emailed to ask how any business can be run without being "administered" and, in this case, just what aspect of the daily administration of an insurance broker's affairs were we contributing to: the window cleaning? The office tea trolley? Higher quality bog rolls in the loo?
We also asked: why is no mention of this "administration" charge on the first page of your insurance quote, rather than the last?
I forget what Flexicover replied; we couldn't be ar$ed to read it. But I now see Flexicover has up-paged its "administration fee" and it's in tiny red type at £1.80p.
Dream on, Flexicover. Dream on. If you can't afford the cost of running a business you yourselves set up, then. . . Tough.
Can we add "customs handling fees" to the list, too?
Talking of last-minute surcharges, online shopping has also seen an increase in buying stuff from abroad, and whilst paying VAT and duty is a fact of life for orders outside of the EU, the assorted "handling charges" and similar euphemisms for the hidden fees imposed by the couriers after shipping often exceeds what you pay customs themselves. It's rather hard to argue it's not a normal cost of doing business as paid for with the up-front postage charges considering they deal with imports as part of their daily routine, and a minimum £10-20 fee is certainly is certainly way in excess of the cost to the courier. I've found they'll generally refund the charge if you insist (though it often takes a lot of persistence) but it would be preferable if they weren't allowed to try it on in the first place.
I wouldn't object so much if these costs were shown up front so I could make an informed decision, but being billed after the event and having my parcel held to ransom until I pay, only to discover that they've miscalculated the charges anyway isn't really improving my "customer experience" or whatever they call it these days.
Oh, and the "foreign transaction fee" that so many banks are keen on imposing is something I'd also like to see the back of.
Debit cards in the UK might only be 20-30p but in other countries it's a bit different.
A business I ran in New Zealand had average transaction values of about 15 pounds.
Debit card charges worked out at about 15% and credit cards at 35%
It _looked_ lower (3-5%), until you realised that there were higher fixed monthly fees if the average transaction value was under a threshold amount - along with more fees if the monthly sales were under a threshold - along with per-transaction fees as well as the %age cut.
The end result was devastating to small retailers with turnover under 100k/month or with average transactions under 40 pounds.
Bank and credit card companies ideas of service were clearly developed by stud farmers.
(Having said that I'm surprised that ryanair/easyjet/etc haven't been jumped on ages ago. All the extra fees are a clear case of bait-and-switch tactics)