Retailers need to be more transparent with their customers to help them avoid merchant surcharges, the Commerce Commission says.

Chair John Small said wherever surcharges are applied, consumers should have the “informed choice” of which payment method best meets their budget and needs.

“Not only do businesses need to remember that any surcharges added must be clearly disclosed and that any reasons for the surcharge are accurately described to avoid breaching the Fair Trading Act, but they should consider the levels of their surcharges as they may be in excess of their costs of accepting the payment,” said Small.

For in-person card payments, customers have the option to insert or swipe their debit or eftpos card which may incur a fee when compared to the contactless function.

The regulator says in most cases surcharges should be in line with the costs of the transaction to the business.

“We want to be clear that we are not against surcharges that are in line with the costs of accepting the payment. The ability to surcharge may make the difference between a retailer accepting a form of payment or not,” said Small.

To help merchants apply surcharges appropriately, an open letter to payment service providers has also been published.

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