Byline from Rachel Stocks – Managing Director American Express Australia & New Zealand
Retailers banking on a bumper year-end trading period are receiving a clear message from their customers in the lead up to Christmas: “Don’t take the shine off Christmas by surcharging at the checkout” – with surcharging revealed to be one of the great shopping annoyances.
The survey of 1000 Australian consumers, click shows penalising consumers for paying for Christmas gifts with their credit card is among the top 10 Christmas shopping annoyances – along with the more common peeves of crowds, sale car park queues and the general hassle of finding the perfect gift.
A quarter of people won’t proceed with an in-store purchase and will go elsewhere if they incur unexpected surcharges to use their preferred credit card. The numbers get worse for online shopping, advice rising to 45 per cent. In fact, more than a quarter (28%) said online surcharges are one of their chief annoyances.
Christmas is the busiest trading period of the year and a time when businesses have the opportunity to keep new customers for life. While increasingly businesses are going the extra mile at Christmas through services like free gift wrapping, discounting and even complimentary refreshments, our research shows that some are undoing all of that goodwill by applying a payment surcharge – something that 93 per cent of customers want removed. Businesses have an incredible opportunity this Christmas to build customer loyalty and encourage repeat business by not surcharging. By doing so they’ll reap the long-term benefits.
Why consumers use credit cards at Christmas
Half of Australians plan to use a credit card to pay for a portion of their Christmas shopping, citing convenience (70 per cent) and the ability to collect points (38 per cent) as the primary reasons. For retailers, this means that more and more people are intentionally shopping at places where they can use their cards without having to endure the embarrassment, frustration and added expense of a payment surcharge.
People will also be looking for opportunities where they can purchase on credit and receive benefits such as extensions to manufacturer’s warranties and protection for loss, theft or damage of items.
The Government recently announced changes will be introduced to stamp out excessive surcharging but we know that surcharging in any form can erode the customer experience businesses work so hard to enhance.
For instance research shows us that more than a quarter (28 per cent) of people are unlikely to return to a business that has surcharged them.
It’s important to remember that businesses DO have a choice when it comes to building surcharges into the cost of doing business. More and more business owners are realising that with so much choice and competition in the marketplace, it’s now simple for people to abandon a purchase and go elsewhere if their needs aren’t being met.