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The POS Software Blog

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

Tagretail margin

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.

Margin is where small business retailers find money they did not know they had

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Ask a struggling retailer about their business and they will usually talk about sales. Ask a thriving one and before long they will talk about margin. That difference matters. You bank margin, not revenue, and in our experience most local retailers have more room to move on margin than they realise.

Here is practical advice we share with retailers, and how the tools in our POS software help act on it.

Start by knowing your actual gross profit, by department and by category. Not what you think it is, what the data says it is. Most retailers who run this report for the first time find surprises: a category they love that earns less than the space it occupies, and a quiet performer subsidising it. Our software reports GP at every level, and the AI report insights will flag more useful data in plain English.

Question habit pricing. Plenty of retail pricing is doubling the cost price because that is what everyone has always done. But customers do not know your cost price. They judge value. On items bought as gifts, or in an emergency, or on impulse, a price a dollar or two higher rarely changes the sale. A one percent improvement in average margin lands straight on your bottom line. Test it on a category and measure, rather than guessing either way.

Stop losing margin at the scale and the counter. If you sell by weight or length, rounding down to the nearest unit gives margin away all day. Our software sells 1.2 kg of birdseed or 0.75 of a metre of fabric exactly, with scale integration, so you are paid for what leaves the shop.

Bundle to protect price. A starter kit or gift pack sold at one package price earns more per sale and is harder for a customer to price-compare item by item online. Bundles are built into our software, and they are one of the most underused margin tools we see.

Get cost prices right, automatically. Margin reporting is only as good as the cost prices behind it, and manually keyed invoices are where cost data goes wrong. The AI invoice import in our software reads almost any supplier PDF and updates stock and cost prices without the typing. Retailers use it to save hours, but the quiet benefit is margin data you can trust.

Deal with dead stock sooner. Stock that has not sold in six months is not an asset, it is money on a shelf losing value. The reports in our software show exactly what is not moving. Quit it, take the small hit, and put the cash into stock that earns. Holding on feels safer and costs more.

Watch shrinkage like it is a supplier. For many shops theft, internal and external, quietly takes one to three percent of turnover, and that loss comes straight out of margin. Accurate scanning and tight inventory records in the software make shrinkage visible, and visible problems get fixed.

None of this requires more customers or longer hours. It requires knowing your numbers and acting on them, which is what POS software should be for. If your current system cannot tell you your margin by category in under a minute, that is worth fixing.

We are happy to show you these reports live, using scenarios from your own shop. Book a demo at towersystems.com.au/pos-software-free-demo.html or call 1300 662 957 (AU), 0800 444 367 (NZ).

How independent retailers can offset the 2026 cost increases

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Award wages rose 4.75% from 1 July. Rents are tracking 4–5% higher at most renewals. From 1 October, the RBA surcharge ban means processing fees that were passed to customers now need to be absorbed or built into prices.

Together, that is around 1.5% added to the cost base of a typical independent retailer. On a 5–6% net margin, it is worth taking seriously.

None of these are negotiable. But there are five places to look for recovery, and Tower Systems customers already have the tools backed by implementation advice with a foundation in practical management in local small business retail.

Pricing on the products you control

Plenty of supplier-set prices are fixed in different retail businesses. Stationery, gifts, homewares and general merchandise are not. Many retailers have not reviewed margins on these categories in over a year. The stock manager tool in the Tower software updates pricing across a whole category in one pass — worth doing before October. It’s fast, easy and safe.

Invoice processing

Many stores spend 5–10 hours a week entering invoices by hand. AI invoice arrivals imports them directly, cuts that to near zero, and removes the keying errors that come with manual entry. Those hours go back to the counter. Cut mistakes and save time with the AI invoice import tools.

Dead stock

Stock sitting unsold for six months typically ties up 10–15% of inventory value. It occupies shelf space and earns nothing. The dead stock report finds it. Moving it out — clearance, supplier return, bundling — puts that capital back to work.

Stockouts

Sales lost to unavailable stock are invisible in most reporting. The insights dashboard makes them visible, with a dollar figure attached. Fixing the reorder triggers stops the leakage.

Theft detection

Theft accounts for around 5–7% of turnover across independent retail. The volume tends to be customer theft; the larger individual losses tend to be internal. The audit and early detection tools find discrepancies well before a stocktake would. Too many small business retailers ignore theft, at their cost!


Pricing, processing time, inventory, loss — none of these require new investment. They require looking.

Tower Systems customers can reach the support team by phone, email or live chat. New enquiries: towersystems.com.au or 1300 662 957.

Advice for local retailers: Sell what people love. The margin is better and so is the business.

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Here is some advice from outside the usual territory of a POS software company. After more than forty years working with local independent retailers, we have seen this pattern too many times to keep it to ourselves.

You will make more money selling what people love than what they need.

The needs are easy to spot in any local shop. Newspapers. Basic stationery. Phone credit. Customers buy these on autopilot and they know what they should cost, which is why the margin is thin. Nobody drives across town for a packet of pens.

What people love is different. A gift that made them laugh. The plush their child will not sleep without. A coin release, trading cards, a greeting card so right for the occasion that price never came up. Emotional purchases hold their margin because there is nothing to compare them against. Customers travel for them. Some will queue.

We watch this play out in the sales data flowing through our software every day, in newsagencies, gift shops, garden centres, jewellers, toy shops. The retailers growing profit are steadily shifting floor space from need to love. The ones standing still are usually the ones defending shelf space for products that stopped earning it years ago.

None of this means abandoning the needs. They bring reliable, habitual traffic, and that traffic is an asset. The trick is what you put in its path. The newspaper customer who leaves with a $30 candle did not come in for a candle. The school supplies shopper was not looking for Squishmallows until they were.

If you are unsure where the love is in your shop, your POS data already knows. Look at what sells at full price. Look at gross profit dollars per square metre by category. Look at what customers ask you to order in, because a special order is a customer telling you what your range is missing.

The software counts the sales. The advice about what to sell comes from decades alongside local retailers, and we share it freely. That is what we mean when we say we are more than a software company.

Sell what people love. Use what they need to introduce them to it.

The POS Software Blog

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