Author: Mark Fletcher

The surcharge free movement in Australia is growing momentum. So much so that newsagents charging a surcharge for the use of a credit or debit card will face even more pressure than before.

While I don’t charge a surcharge in my newsagencies, I know of plenty who do. Given the 6% commission on lottery products or 2% commission on transport ticket sales, a surcharge is necessary for many transactions that would otherwise be loss-making.

There is no future for a retail business that sells goods or services where it does not even cover operating costs.

However, Surcharge Free is a thing, a movement … apparently funded by American Express, surprise surprise – and they are using consumer advocate and former Choice spokesperson Christopher Zinn as their public face.

Check out this video:

This video from House explains the retail business value better.

From a newsagency business perspective, the House story does not connect as they control their prices and therefore their margin. Agency focussed newsagencies do not have this luxury. Newspapers, magazines, transport tickets, lottery products, phone top-up … they are all sold at a fixed price with a fixed, small, margin. It is these products that are problematic when it comes to credit and debit card surcharges.

Here is a video from tailor Germanicos:

Again, a product where the retailer controls their margin.

All these videos are from American Express. The surcharge free website is full of data, presented well, that encourage retailers to confront the challenge of surcharge free:

And if that is not enough, there is this:

My own view is that a surcharge in retail is a point of friction. It is an invitation to a shopper to shop elsewhere. It has them wondering where they could shop next time – yes, to save a few cents. They do not care about your margin situation.

So, what do you do?

One option is to pull back on low-margin agency business. I think that is the smart move. It is happening naturally with transport tickets, lottery products, mobile phone recharge and phone cards – with suppliers of these pushing online purchases aggressively. But I know this is easier said than done with many newsagency businesses relying on agency business for more than 50% of foot traffic and revenue.

The other option is to grow non agency business, higher margin business, to fund the credit and debit card fees.

The other option is to charge a surcharge. However, I think that will only end badly for the business given the forces being rallied against surcharges.

I do think shoppers see it this way: no surcharge = better customer service.

My advice to small business retail newsagents is to think through carefully what is best for the long term health and value of your business asset, do not apply a surcharge without thoughtful consideration.

Blueshyft emailed newsagents yesterday afternoon asking them to call their POS software company for a stock file update.

Despite the claim in their email, Blueshyft had not told my newsagency POS software company – serving more newsagents than all other POS software companies combined – anything about the update, they had not provided the file, we had not seen the file and could, therefore, not help. We were not told the email was being sent.

But the support calls came. In huge number. Newsagents calling Tower because Blueshyft told them to. Some newsagents were rude to Tower employees, saying we were fools for not knowing about this.

This all happened when the Tower COO and I were on a flight from the Gold Coast to Melbourne. We had been on the Gold Coast on business.

The Tower help desk was slammed – all because Blueshyft had kept us in the dark and because some newsagents didn’t believe that we had no knowledge of this new file.

I called Blueshyft CEO Kain Warwick at 04:06pm when I landed and had realised the mess. Kain returned the call at 05:12pm. I and expressed by frustration at what is, in my opinion, appalling communication from Blueshyft and a lack of respect for what Tower Systems does for them. Kain had no empathy for the situation. I felt the call was a waste of time.

I also called the CEO of XchangeIT as they had subsequent to the Blueshyft email sent the file. He as not aware of the issues, of the broken communication. I also expressed frustration at the large file but it was not his position to comment on this.

The call did not go well. Here it is 7am the next day and I am yet to receive any update from Blueshyft on why they would email their customers telling them to call my company (and other companies) hen they had not advised to expect the calls and have the information ready to assist.

Tower Systems gets get no compensation for any work related to Blueshyft. XchangeIT is paid to do what they do. I suspect Blueshyft pays VANA for their support and kind words. Yet the POS software company with the most newsagents is expected to be mind readers and know about a file we have never seen.

What happened yesterday is ridiculous in my opinion.

I have told the Tower help desk we will not take calls on this new file. Instead, the help desk experts have updated our online advice. This has all the instructions you need to load the file. Click here for our advice.

Had Blueshyft been professional, they would have provided the file to the Tower support team, let them test it, let them provide Blueshyft with advice on loading and then communicated with newsagents. Instead, they dumped the heavy lifting on companies like Tower for no compensation at all. This is typical Blueshyft. They say they are helping newsagents yet it is others who are being asked to donate to their cause.

But on the file, it has 2,700 stock items. It does not make sense they want to bloat your system with all these but that is a separate issue.

Yes, I am frustrated as it is things like this that divert our attention from providing support individual customers of ours call us for – calls from the businesses that pay for our support services.  Blueshyft is freeloading at my expense and, ultimately, at your expense.

In his defence, Kain Warwick will say he emailed me and the Tower COO on Monday about a new file comping saying he would like to discuss it. This is kind of odd. he has our phone numbers. he has the Tower help desk contact details. yet he sent an email saying he would like to talk. there was no time indicator on the file release, no details at all. As Gavin and I were at an important conference on the Gold Coast we figured we would call Kain on our return.

This whole situation is ridiculous. You have VANA doing their song and dance about money some newsagents are making from Bueshyft, probably because Blueshyft pays them a fee to tout for them, yet others are expected to carry Blueshift for nothing.

This is agency business for which, in my opinion, there is no long-term upside for newsagents.