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The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

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Pricing after the surcharge ban: how to lift prices without upsetting customers

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Since 1 October 2026, Australian businesses can no longer add a surcharge to payments made by eftpos, Mastercard, Visa or American Express. For a lot of independent retailers, that small line at the bottom of the receipt covered a real cost. The cost hasn’t gone anywhere. You now have to recover it another way, and fairly.

We know of many retailers where the loss of the surcharge has hit hard. This blog post bring together advice for these retailers. What you do needs care.

Customers are paying attention. Online forums are full of complaints about businesses using the ban as cover for bigger price rises, or renaming the surcharge a “service fee” or “platform fee”. The ACCC has said plainly that businesses must not mislead customers about why prices changed. Get this wrong and you lose more than a few cents a sale.

Start with your actual card cost

Before touching a price, be sure of what acceptance costs you. Get your merchant statements for the last three months and calculate the effective rate: total fees divided by total card sales. Include terminal rental and any monthly minimums.

Many retailers find the true figure is lower than the surcharge they used to charge. If you charged 1.5 per cent but your effective cost is 0.9 per cent, a 1.5 per cent rise across the board isn’t cost recovery. Customers will notice, and some will tell you so.

While you’re at it, call your payments provider and ask whether your plan still suits your volume. Lower interchange caps are part of the reform, so it’s reasonable to ask how they flow through to you. If your POS lets you choose your payment provider, you also have room to shop around.

Lift prices selectively, not evenly

A flat percentage increase on every product is the easiest change to make. It’s also the easiest one for customers to spot. Use your sales data instead.

  • Leave known-value items alone. Every shop has products customers know the price of, like a newspaper, magazine, cat food, dog  – the everyday item people notice. Keep these steady. They anchor your price reputation.
  • Lift where you add value. Gifts, specialty lines, exclusive ranges and items that need advice carry less price sensitivity. A small rise here is rarely noticed.
  • Round sensibly. Moving $9.40 to $9.50 is gentler than moving $9.95 to $10.20. Price endings matter more than most think.
  • Review slow sellers separately. If nobody is buying it, a price rise won’t help. Decide whether it belongs in the range at all.

Your POS software should show you sales by item, category and margin. Sort by units sold and margin together, and the safest places for a modest increase stand out quickly.

Protect trust with how you communicate

Skip the sign apologising for higher prices. What you need is staff who can answer honestly when a customer asks.

  • Don’t tell customers prices rose “because of the surcharge ban” unless that is accurate and proportionate.
  • Remove all surcharge references from counter signage, invoices, receipts and your website.
  • Weekend and public holiday surcharges are not part of the card ban, but they must be clearly displayed if you use them.
  • Brief your team on a simple, truthful line, such as: “We stopped charging card fees, and like everyone our costs have gone up, so we have adjusted some prices.”

Find margin outside the shelf price

Pricing is one lever. The retailers who handle this well tend to look at their buying, their mix and their shrinkage at the same time.

  • Buying. Check supplier invoices for cost increases you haven’t passed on. Many shops absorb supplier rises for months without noticing.
  • Mix. Promote higher-margin lines through placement and counter displays. Changing what customers buy can do more than a price rise.
  • Shrinkage (theft). Every item that walks out unpaid is lost margin. Tighter stock counts often recover more than the surcharge ever did.

What to do now

Work out your effective card cost. Pick twenty known-value items to hold steady. Then look at your highest-margin categories for a small, considered increase. It’s a morning’s work, and it beats guessing.

If you want to see how sales and margin reporting can make this easier, Tim and Justin at Tower are happy to talk through your shop’s situation. Call 1300 662 957 or email sales@towersystems.com.au.

Card Surcharges End October 1. Retailers Deserve Control Over What Comes Next.

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From 1 October, the credit card surcharge ends for Australian retailers. Payment costs that were passed on to shoppers will now sit inside the business. For a small retailer, that makes payment processing rates matter more than they ever have.

Tower Systems has been preparing its customers for this shift for months, helping many retailers switch payments providers for better terms ahead of the deadline.

Our advice comes from experience, and a desire to help small business retailers. We want to ensure the transition is smooth, safe and valuable for our customers.

The company can do this for one simple reason: Tower Systems is payments provider agnostic. The software does not lock retailers into one payments company. Retailers choose the provider and the pricing that suits their business, and they remain free to switch when a better deal appears. That control now flows straight to the bottom line. When surcharging ends, every basis point on the merchant rate is money the retailer keeps or loses.

Plenty of POS companies work differently. Some earn a margin from a preferred payments partner. Some take it further and charge a percentage of every sale that passes through their software. It is worth pausing on that model. A software company taking a slice of a retailer’s revenue is, in effect, taxing that retailer’s sales. The busier the shop, the bigger the tax.

Tower Systems does not do this. There is no fee based on revenue. The company’s view is straightforward: a retailer’s revenue is theirs to keep. Software should be paid for as software, not as a silent partner in every transaction.

For retailers reviewing their setup before October 1, two questions are worth asking of any POS provider. Does the software let the business choose any payments provider? And does the software company take any cut of sales, directly or through a payments arrangement? The answers reveal whose interests the software really serves.

Tower Systems develops and supports POS software for local specialty retailers in Australia and New Zealand, serving only indie retailers, not franchises or chains.

More on payments choice at www.towersystems.com.au.

At Tower Systems, we’re here: 1300 662 957 or sales@towersystems.com.au. If you’re in NZ, call 0800 444 367. Contacting a human is easy.

Payment choice: why the freedom to choose your processor can save you thousands

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When you choose POS software, you are often also choosing who processes your payments. With some systems, that choice is made for you. The software and the payment processor are bundled together, and the rate is set by the vendor. At Tower Systems, you keep the freedom to choose your own provider and negotiate your own rate.

That freedom has a real dollar value.

One retailer switched from software that locked them in on a payment platform and is not saving thousands of dollars a year.

Many international POS platforms tie their software to their own payment processing. To use the software, you use their payments, at their rate. It is easy to set up, and that is partly the appeal. Easy can be expensive.

This is like a tax on every sale.

When your sales grow, the money the software company makes from you grows. What are they selling: software, or a taxation system on your success?

When one vendor controls both the software and the payments, there is no pressure on the rate. You cannot shop around and you cannot negotiate, because the processor is built into the system you depend on. A small margin on every transaction across a year’s trading adds up.

A worked example

A specialty retailer turning over $1.5 million a year in card payments, on a bundled platform-tied processor, might pay an embedded margin of around 0.7% above the underlying cost of acceptance:

  • $1,500,000 in card turnover
  • 0.7% embedded margin
  • Around $10,500 a year

If that same retailer can choose their processor and negotiate directly, moving to a competitively priced provider could save more than $10,000 a year. That stays in the business.

The exact figure depends on turnover, card mix and the deal negotiated. The basic calculation is the same for any retailer: when you can shop and negotiate, you can lower the cost. When that option is gone, you pay what you are charged.

Why we leave the choice with you

We could bundle payments into our software. We chose not to.

You know your turnover, your margins and your existing banking relationships better than any software vendor. Keeping that choice with you means you can shop the market, compare providers on rate and service, negotiate using your own volume as leverage, and change processors later without changing your POS software. When payments are locked to the software, switching processor can mean switching systems entirely. When they are separate, your options stay open.

A locked-in processor takes a quiet margin on every sale. Over a year, for a busy specialty retailer, that can be more than ten thousand dollars. The freedom to choose and negotiate puts that decision back where it belongs.

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