Qantas takes $100m extra in surcharges – CHOICE

It’s time to end the surcharge rip-off

 CHOICE says Qantas’ credit card surcharges may be costing travellers $100 million more than the airline pays to process the payments.

The Reserve Bank of Australia (RBA) Payments System Board meets today and is expected to introduce new surcharge limits designed to limit excess rip-offs.

“Our analysis shows that the Qantas group may be charging consumers at least $100m more each year than it needs under the guise of covering processing costs,” says Matt Levey, CHOICE Head of Campaigns.

Qantas charges $7.70 for credit card payments on domestic bookings and $30.00 for credit card payments on international flights.

“We have written to Qantas CEO Alan Joyce, asking for clarity around the real cost of processing credit card payments as Qantas does not make this crucial information available but our estimates are that consumers may be paying millions of dollars in excessive fees,” says Mr Levey.

The RBA Payments System Board is likely to limit credit card surcharges to reflect the real cost to the business of accepting the payment.  CHOICE says this development would put the onus on Qantas to do the same.

“Qantas was one of the first major Australian businesses to impose credit card surcharges following the Reserve Bank of Australia’s move to allow such charges from 1 January 2003,¹” says Mr Levey.

“At the time, Qantas indicated it was ‘absorbing credit card merchant fees,’ and would continue to do so even after adding a one per-cent levy to credit card purchases. However we estimate Qantas is now collecting more than $204 million in surcharges every year, while potentially paying less than half of that to their bank to process the transactions. It’s time for the airline to come clean.”

CHOICE awarded Qantas a Shonky award in 2009 for the $7.70 surcharge

Read CHOICE’s analysis of the sky-high surcharge rip-off.