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.
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