The Australian economy is facing many challenges due to the impacts of COVID-19. These economic difficulties have caused several businesses across the country to struggle financially, with many having to reluctantly make tough decisions to stay afloat. One such measure being taken by an increasing number of businesses is the implementation of a surcharge fee.
While COVID-19 seems to be fading in 2023, the after-effects are still a very present reality for many businesses. As restrictions have slowly been lifted and the economy begins to recover, companies have to cope with higher costs of doing business due to inflation and increased operating expenses.
Given the rising cost of goods and services, some businesses are choosing to apply a surcharge fee on top of their regular prices to cover these additional expenses. This surcharge is a common practice in the service industry, where businesses can add anywhere from 5-20% to the final bill as a way to offset the increased costs.
In Australia, the surcharge fee has become increasingly popular due to the prolonged economic downturn and subsequent high inflation rates. As businesses struggle to make ends meet, the added surcharge helps them stay afloat and remain competitive. With more customers paying the surcharge, businesses can afford to keep their prices lower than their competitors, making them more attractive to potential customers.
Ultimately, the surcharge fee is beneficial for both the business and its customers. Businesses can remain competitive, while customers enjoy lower prices. For this reason, more Australian businesses have been implementing surcharge fees in an effort to stay profitable and provide customers with the best possible value. The trend is likely to continue as long as economic conditions remain challenging, and businesses need to find new ways of staying afloat.
How does surcharging work? According to the Australian Competition and Consumer Commission, a surcharge is an “extra charge passed on by retailers for goods or services when payment is made by customers using non-cash payment methods”. This includes credit cards, debit cards and mobile payments such as Apple Pay and Google Pay.
Surcharging is not a new concept. Retailers have been implementing surcharge fees for decades, but in recent years the idea has become increasingly popular in AU businesses. This is because surcharging helps to offset the costs associated with accepting non-cash payments, such as merchant processing fees, and can help to make the business more profitable.
This year, you may want to utilise a fee-free EFTPOS system, and this is where you can pass the payment processing fees onto customers as a surcharge. By implementing a surcharge, AU businesses can reduce their merchant processing costs and ultimately increase profits.
If you haven’t seen EFTPOS systems before, they are excellent solutions that allow consumers to pay for goods and services using their debit or credit cards. They are incredibly popular in AU, as they offer customers the convenience and security of paying with a card without having to worry about cash. In fact, modern solutions even allow customers to pay using digital and mobile wallets.
Furthermore, the best systems come with analytics and reporting options that enable business owners to gain valuable insights into their customers’ payment habits. This helps them make more informed decisions about marketing, pricing, and other aspects of their business.
As an Australian business in 2023, don’t think that you need to absorb the cost of living crisis alone. While it’s been difficult for businesses to stay afloat, more and more are adopting a surcharge fee to combat rising costs. Why not consider this option?