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How to avoid a cafe rip-off

Almost 4000 Aussie businesses have already joined the Fee-Free Shop campaign. Picture: iStock
Almost 4000 Aussie businesses have already joined the Fee-Free Shop campaign. Picture: iStock

Sydney cafe owner William Xia used to enforce a $10 minimum spend rule - until he noticed it was actually bad for business.

Mr Xia, the joint owner of Sourdough Panini Bakery & Cafe on York St in Sydney's CBD, ended up ditching credit card surcharges and minimum spends after realising those policies were unfair - and were turning potential customers away.

"We have some of the cheapest prices in the city so it meant customers would have to buy four coffees instead of one to meet the $10 minimum," he said.

"As a customer myself in other places I don't see the point of minimum spends and I don't think it's right to have credit card surcharges.

"And we are seeing a trend towards tap and go, mobile phone and watch payments which is starting to happen more and more, so if you don't accept them, you will be stuck in the past."

Since scrapping the unpopular policies, the cafe has also joined comparison site finder.com.au's Fee-Free Shop campaign, which recognises Aussie businesses that choose not to charge customers a minimum spend or a credit card surcharge fee.

Since launching in mid-September, almost 4000 businesses have already signed up - and Mr Xia said he hoped that number would continue to grow.

According to finder.com.au money expert Bessie Hassan, independent cafes and retailers were joining the campaign alongside huge franchises including McDonalds, Woolworths, 7-Eleven, Krispy Kreme and Oporto.

McDonalds, Woolworths, 7-Eleven, Krispy Kreme and Oporto are already on board alongside small, independent businesses. Picture: iStock
McDonalds, Woolworths, 7-Eleven, Krispy Kreme and Oporto are already on board alongside small, independent businesses. Picture: iStock

She said finder.com.au research showed 94 per cent of Australians believed credit card surcharges were a rip-off, while 68 per cent of consumers would back out of a purchase if they discovered a surcharge would be applied.

"It's 2018 - we think surcharges should be absorbed as part of the cost of doing business," she said.

"Customers aren't charged for keeping the lights on - so why should they be penalised for paying by card?

"Excessive fees hurt consumers and will stop them coming back. But the great response we've had to this campaign shows how much businesses value their customers and their loyalty."

Members of the public are encouraged to nominate shops that don't charge extra fees for paying by card, and businesses can also nominate themselves.

Once verified, they will receive a blue Finder-approved Fee-Free Shop sticker to display at their premises.

"More Australian businesses are going to have to phase out these unnecessary fees or risk losing customers," Ms Hassan said.

"Those who don't charge fees have the upper hand because they get repeat business and that snowballs.

"As a consumer, how and where you spend your money should be your choice - and your choice only. There's a light at the end of the tunnel for consumers and this is only the beginning."

Social users can also use the hashtag #feefreeshop to let other customers know about merchants who don't pass on fees to their customers.

Click here for more information about the campaign and to find out which businesses are already on board in your area.

Topics:  cafes credit card editors picks surcharges