A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Tyro responds on RBA EFTPOS fee changes

Tyro, the EFTPOS service now used by more than 1,000 newsagents, has published guidance on EFTPOS fees in the wake of changes announced by the RBA in relation to EFTPOS fees. The EFTPOS fee issue will need to be watched carefully by newsagents as EFTPOS has been a plaything of the major banks and the supermarket duopoly to their advantage for too long.

8 likes
EFTPOS fees

Join the discussion

  1. Michael Caffery

    At this time of year could I ask for Newsagents to make comment on the ever increasing financial burdon eftpos fees are having on our business as more and more people prefer their credit cards.
    I just spoke to one of our fellow storekeepers who has a food outlet and he charges 20c per eftpos transaction and has no negative comment .?
    With eftpos cost to our outlet over $800 pm it is becoming a major expense and major worry.Your thought/comments most appreciated,.

    Michael

    Albany Creek News

    Thanks

    0 likes

  2. Jenny

    We switched to tyro recently and put a 15 cent charge for eftpos and credit transactions under $15 and one percent for all lotto purchases using credit card. Set this up through tower so it’s easy for staff. Dont charge for paper accounts under $15, that’s the only exception.
    We get too many small purchases to not recoup some money. Lose the odd sale but are still way in front.

    0 likes

  3. Mark Fletcher

    We don’t charge for EFTPOS. Instead, we price items in our store based on the service we provide. This means we now charge more for stationery as we’re a convenience outlet. This makes us more money than charging a surcharge at the counter for EFTPOS. It also reduces sales counter stress.

    1 likes

  4. Ben

    As Mark says, build the charges into the product. None of our major competitors in the Channel charge a surcharge, I would not want to be different in a negative way! Provide a great service and price accordingly, and if this means a 0.8% increase in prices across categories that you can change prices on (i.e. magazines) then do it.

    1 likes

  5. Jenny

    Guys I can,t put a surcharge on lotto and thats accounts for a lot of small purchases

    0 likes

  6. rick

    anyone get a call from suncorp, seems they are chasing some of the tyro business

    0 likes

  7. Mark Fletcher

    Suncorp tend to go in with a deal that looks good but is not necessarily long term.

    Jenny what do you charge for A2 sheets and what’s your revenue in a year?

    0 likes

  8. SHAUN S

    yep suncorp are chasing up this way as well , i would be happy to go with suncorp but i am not going to be tied up to a contract , if a product is that good a contract should not be required the product itself should keep you with them ..

    0 likes

  9. Jenny

    Mark, we charge 85c for white and $1.45 for coloured – same as Big W. Were cheaper than Big W till recently but matched prices as being cheaper wasn’t the reason they bought cardboard from us.
    I don’t know what my revenue is for a year as we have only put this fee on a couple of months ago.
    Customers using card in the past oftened asked ‘do you have an eftpos limit?’
    Before credit card could be used for lottery purchases it wasn’t such a problem and we had a $10 minimum for EFTPOS but if the purchase was for magazines, gifts, cards or stationary we would not apply the fee.
    So many customers use credit to pay for lotto now that they can.
    Young people want to use EFTpos for a packet of chewy and they don’t care about an extra charge.
    We have a sign on each explaining this fee and because it is set up clearly on our software it doesn’t cause our staff any extra stress.

    0 likes

  10. Mark Fletcher

    Jenny, if your newsagency is like most, shoppers will not price compare you with Big W, they will think you are more expensive. Meet their expectations, charge $1.50 for white and $2.00 for colour. If you are using the Canson product then you have better product than Big W.

    0 likes

  11. Jenny

    Mark, charging so much for a school item (we are in a family area and we sell heaps of board) to make up for money lost on customers who buy a $5.20 lottery ticket and a $1 tele (profit 45c), and use EFTPOS to pay for it, is wrong.
    Let the card users pay, its a lousy 15c.
    So many businesses have a minimum for EFTPOS, and charge a percentage for using credit, and they are making much better margins than newsagents.
    Absorbing unneccesary costs is something an old newsagent would do, not a newsagent of the future!

    1 likes

  12. Mark Fletcher

    Jenny I often ask what newsagents sell cardboard for at my workshops and those who do change to a higher price tell me there is no shopper push back.

    I disagree with you.

    0 likes

  13. peter stewart

    After hearing Mark say this at a workshop, i came back to the shop and the first thing I did was bump our cardboard price from $1 to 1.50 with NO customer feedback since.

    Look at the customer who buys cardboard, is it a regular purchase? in my store it is not. You might find people dont even know BigW carry cardboard, and they sure as hell dont know the price of it there.

    I am just waiting till january to put the price up again to $2

    0 likes

  14. wally

    And dont sell $1 cards. Sell $2 cards. You double your margin and almost nobody cares. The ones that do care you probably dont need as customers because thats all they buy. and $1.00 wrap put it up to $1.50 as above.
    I have a minimum of $10 but only apply it when somebody wants lotto or they want a stamp for 60c. I note many people make up their purchase to $10 when they see the sign so that increases the basket??

    3 likes

  15. Michael Caffery

    Hi Jenny

    I’m with you since so many put their lotto on a card it’s becoming a major expense last month about $1000. it,s now challenging electricity as a major expense.
    I already price my stationery especially lower seldom used products as high as I can I try to get a 60% return on the category excluding Ink and Paper. 50%gp no longer cuts it with me.
    Our shops need to producing 40% gp plus or very very close to it to survive. It’s a user pay as far as I am concerned and in early 2013 i will be giving my customers a month notice and I will be explaining that I/we need to recover this Bank rip off.
    As most shopping centre tenants face fixed cost increases of 5% plus each year compouinding just have a look at what your rent will be in 5 to 7 years using a compouind rate of 5%? pretty scarry stuff when we have a lot of our old traditional products in decline.

    Mark from memeory you dont have lotto in a number of your shops so it may not be presenting such a problem.
    But to the every day battler newsagent i think it is and shoud be recovered.

    Thanks

    any more comments

    0 likes

  16. rick

    eftpos fees are starting to stand out on my P & L as well. dont as yet charge a fee but it has crossed my mind.
    with the ever increasing volume of card use, i think the fees should be reducing, its simply economies of scale at work.
    Not sure which way to jump with this one, not keen on a fee but not keen on the ever increasing costs im wearing either.
    Wondering if a flat .10c fee on every card transaction would cover the cost, im sure most people would not even bother if they got slugged .10 cents extra, has anybody done the sums? I know heaps of people that dont bother about $2 fee on using another bnanks ATM, so .10 cents wont raise an eyebrow

    0 likes

  17. rick

    just did some quick maths, looks like would need .20 cents per transaction to cover costs, also need to push the cash out aspect a bit more i think, as this type of transaction attracts no fees.

    0 likes

  18. Mark Fletcher

    Michael, I has Tatts for 12 years at Forest Hill until I sold the business and did not charge a surcharge. Since I put in Tyro we pushed cash out for the reasons outlined above.

    We each of us need to make the decision that serves our needs and positioning. Personally, I do not want to be the business charging a penalty in a centre where my competitors do not.

    1 likes

  19. rick

    just as matter of interest, i followed up on suncorps offer, had them compare my november fees (im with tyro) and what it would have cost if i was with suncorps new deal
    tyro $524.24
    suncorp $292.96
    i like tyro, and am not keen on a contract that suncorp require, BUT the savings are substantial and hard to ignore. the suncorp deal i understand is a newsagency deal. Happy for tyro to come back and dispute suncorps claim, no hidden agenda here, just sharing info.
    i think mark would know that i have no link to either party, and i like and use tyro but its about business.
    oh and i believe suncorp is integrated and used broadband so speed should not be an issue here.

    3 likes

  20. Paul

    Rick, that’s pretty well the same conclusion I came to with Suncorp vs the CBA eftpos I have currently. It actually was an even bigger saving for me as my CBA unit uses one of our phone lines and the suncorp unit is broadband or mobile. Also the no charge for rolls and other stationery saves even more.

    Wally, I also agree with what you’re saying. If you have $1 cards that’s what people will buy. I have $3 cards as my cheapest and the people who would otherwise buy a $1 buy a $3 and we sell what would be the $2 paper for $3. 🙂

    1 likes

  21. Jenny

    Rick, all newsagents in our region have an eftpos fee, and some have been doing this for years.
    I asked 3 full time staff this morning have they been losing any sales due to this fee – my daughter has lost 1 in the last 2 weeks, the others none. I have lost 2 since I implemented this change.
    Customers either don’t worry about it (most), or they buy another item to bring it up to $15 or they go to teller machine and come back with the cash.
    I feel my limit should be $9.95 not $15 but will monitor it for a while longer. If we didn’t sell lotto I wouldn’t charge a fee.
    Peter & Mark you have convinced me to put my cardboard up, thinking about it when I increased it to match Big W it didn’t affect sales.
    Off topic from eftpos fees, we have cut our electricity bill from approx $1400 to $600 a quarter after changing our light fittings thru Apathco Group. Cost $8000 -, we paid half gov’t paid half.

    1 likes

  22. Jeff

    I got rid of $1 cards and have not looked back. I’m not a discount shop and they sent the wrong message.

    2 likes

  23. Jarryd Moore

    It is important to remember that one just doesn’t lose a sale at the point of purchase. Many customers won’t complain or walk away immediately when they find out you have a surcharge … they just won’t come back next time … or they might be tempted to try a competitor … or decided to shop with you less frequently.

    And let’s not forget that cash has a cost associated with it as well. There is the insurance costs, the handling/transport costs and the human error costs (incorrect change, etc).

    Pushing cash-out is a good way to reduce the fees. It may be worthwhile advertising (possible on the EFTPOS terminal itself) that customers can “avoid those $2 ATM fees by getting cash out here for FREE!”

    Jenny,
    It may appear wrong to you, however high margin on some products subsidise the low profit on others in most retail businesses. The point being made is that if you charge a fee for using a card the customer is going to feel that they are being ripped off, or that it isn’t fair, because let’s be honest there are a very large number of people that don’t carry cash and only use their card. Whether or not it is fair is almost irrelevant. It may be an irrational, emotional response but it the job of the retailer to mitigate such potential negative responses where possible.

    2 likes

  24. JONO

    Good one Jeff, what’s the point of carrying $1 card i don’t understand

    0 likes

  25. Mark Fletcher

    Discount cards have no place in newsagencies sin my view. That said, I understand they are big in WA.

    0 likes

  26. Steven

    We won a Lotto customer from another newsagent because they charged him an eftpos fee. It was not the money, but the principle. This customer is now our second biggest regular for Lotto, plus they have magazine putaways and regularly buy stationary.

    The other newsagent’s decision to charge a fee was a great move for MY business 🙂

    2 likes

  27. Gregg

    Jarryd,
    Good point about charges and people not coming back. Most of the shops in our strip will charge $1 for all card transaction, we do not charge but have a minimum of $10 on all card transactions.
    Being in a tourist town on the coast some, not all people have a winge about the charge. Several weeks ago a letter was published in our local paper (from a tourist) bemoaning the fact this is happening in our town. As the letter writer said she believes it to be a ripoff by some local businesses to gouge the tourists and local alike.
    This letter apparently was also published in her local paper. Not a good thing from my point of view.
    On another card topic i had a teenager come in yesterday and ask if i have wave pay for a card transaction, i explained no but swipe the card and it will do the the same thing. She walked and said no thanks. Result 1 lost sale against a card i believe was not hers.

    0 likes

  28. Brendan

    Jarryd your’re spot on there. A servo on the way home charges a fee for eftpos and I will only use it if I don’t think I’ll get home without filling. Even then I only put a small amount in the tank so fees are a turn off. Better to up costs a little on stock as this is not nearly as “in your face” to the customer.
    A half of a percent increase on all stock that we have control over would go close to covering fees.

    0 likes

  29. h

    Not quite same thing but, customers DO notice the little charges adding up. I have had several incensed customers talking about the clip Tatts take now to post a prize cheque, not happy at all!!!

    0 likes

  30. Jenny

    Gregg, if you have a $10 minimum do you lose sales that are under $10 if they don’t have cash?

    0 likes

  31. Gregg

    Jenny, we did this for a reason, mainly people coming in buying a paper and wanting to us a card, even a 50c lollipop. Just not worth it. We have a sign stating that out minimum for all card puchases is $10 and that has encouraged people to spend more to make up the $10. People are not offended if they know up front. Never had complaint and we have had this in place for 18 months.

    0 likes

  32. Jenny

    Greg, that is what we used to do but found we did lose sales by not taking card under $10.

    0 likes

  33. Brendan

    We have a $5.00 minimum and suggest that customers may need cash out with transactions less than this. The usually either tace the cash or spend a little extra, I don’t believe we lose more than a few sales pe ryear.

    0 likes

  34. Jarryd Moore

    I think a min spend of $5-10 EFTPOS is not unreasonable. Even better if you promote no minimum if you get cash out. If you promote it correctly, it can look less like a restriction and more like a ‘offer’.

    (big bold text) NO MINIMUM EFTPOS WHEN YOU GET CASH-OUT
    (smaller text) $10 min for purchase with no cash-out

    For the record we don’t have any minimum spend for EFTPOS and all our staff are trained to offer cashout.

    And on the paywave/paypass thing – we actually have these and they are used very regularly.

    0 likes

  35. rick

    i thought there may have been more discussion around the new suncorp eftpos deal on offer. was also hoping tyro might come in and refute the suncorp offer?

    0 likes

  36. Glenn

    I know of a large newsagency that made the switch from Tyro to Suncorp based on the better rates.

    Problem came in that integration between pos system and terminal did not work, and after about 6 weeks of Suncorp and pos vendor trying to fix the issue he went back to Tyro.

    If integration is important to you, suggest you do your homework before switching and get firm commitments that it will work as promised.

    0 likes

  37. Mark Fletcher

    PC EFTPOS is awful to integrate with primarily due to the lousy support from the banks.

    The package or Suncorp rates are not great.

    0 likes

  38. Elaine

    Im a customer, and I think a 20 cent transaction charge is reasonable. At lunch today I went to NEXTRA newsagents in Marrickville and they tried to charge me 59 cents fee. We all have costs in business, but there needs to be a cap.

    0 likes

  39. subaru

    Elaine, the retailer is only allowed to charge a fee equal to what the EFT provider charges the retailer.
    eg, if the EFT charges the retailer 15c for eftpos transactions, the retailer can only charge you 15c

    This was put in place to avoid the rediculous fees some businesses were charging for EFT and credit card transactions…Eg Airlines and their online booking business

    0 likes

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image