Surcharging is becoming a more common business practice across Australia and New Zealand, including within the beauty industry. Surcharging simply means passing on the card processing fees from the business to the customer. It’s usually a small additional amount for the customer to pay in the salon, but can add up to significant savings for the business over time.
That’s why Timely decided to build a surcharge feature! This feature is currently in the pilot stage, with only a limited version available. For more information on whether the current version will work for you, read the 'Can I use surcharging?' section below.
In this guide we'll cover:
- Can I use surcharging?
- Understanding surcharging
- Your obligations when surcharging
- Frequently asked questions
Can I use surcharging?
Timely's surcharging feature is currently in the pilot stage, with only a limited version available. The pilot version has everything you need to start surcharging, including:
- A single setting to turn surcharging on/off that will apply to all transactions with your TimelyPay terminal devices and business locations
- See the surcharge amount reflected in the checkout, on the terminal and in invoices
- Plus the ability to refund a transaction that had a surcharge applied
Right now, surcharging is only available on Timely’s web app. Mobile will be coming soon, along with surcharges showing in the TimelyPay transaction history report.
For now, our surcharges don't quite work smoothly with our EOD cash-up feature and accounting integrations like XERO, MYOB, and QuickBooks. Don't worry though, we're on it and aiming to make improvements later this year! In the meantime, if surcharges are important for your business and you want to use them, just know that the values shown in these areas won't include any surcharges (surcharge exclusive).
For more information on how to setup surcharges, read our guide: Terminal card surcharging setup.
Understanding surcharging
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What is surcharging?
Surcharging is the practice of passing on card processing fees to customers. An extra fee is automatically added to the total transaction amount when customers pay in-salon. This small fee is intended to cover the cost of card processing fees for the business.
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Is surcharging legal in Australia and New Zealand?
Yes, surcharging is legal in both countries. There are regulations and guidelines by respective governments and payment providers to ensure fairness and transparency. It’s important that business owners familiarise themselves with these regulations and guidelines before they start surcharging.
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Are there restrictions on surcharging?
Yes, both Australia and New Zealand have regulations in place to prevent excessive surcharging. Businesses are generally not allowed to charge more than the actual cost of the card processing fees. Additionally, customers must be informed of the surcharge prior to payment.
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How much can a business surcharge?
If you are surcharging through Timely, the amount you pass on to your client will be the exact amount of the card processing fees for the transaction.
For example, for in-salon payments through a TimelyPay terminal in New Zealand, the standard rate is 2.49% + 5¢ per transaction. A surcharge would be used to cover this fee.
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Why do businesses surcharge card transactions?
While a card processing fee is a small additional cost for a customer, they can add up to be a significant expense for businesses over time, particularly for small transactions. Including a surcharge allows businesses to partially or completely cover this fee.
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How do taxes work with surcharges?
TimelyPay fees and Surcharges can have different tax treatments, we suggest you talk to your accountant as they'll be able to give you the most accurate information based on your unique business needs.
Your obligations when surcharging
As a business owner, you have obligations towards your customers when surcharging – this allows customers to know about the surcharge and choose to accept it or pay another way.
We strongly recommend that you familiarise yourself with your government regulations and guidelines on surcharging prior to introducing a surcharge in your salon.
For Australian businesses: See the ACCC (Australian Competition & Consumer Commission) guidelines on card surcharges here.
For New Zealand businesses: See the Commerce Commission New Zealand guidelines on payment surcharging here.
Here’s a summary of the main obligations for Australia and New Zealand:
- Inform customers about the surcharge: Be transparent about the surcharge and the customer’s payment options ahead of payment. You may also want to include signage at your point of sale or in your salon to inform customers of the surcharge.
- Provide an alternative payment method: You must provide your customers with at least one alternative payment method that does not incur a surcharge, such as cash. This should also be communicated to your customers prior to making payment.
- Only surcharge to cover the card processing fees: A surcharge should not exceed the additional cost of accepting the payment that the surcharge applies to. Simply put, this means the surcharge should only cover the card processing fee for the payment. The customer's receipt must display the surcharge amount. We take care of this for you by including this on the invoice or thermal receipt that can be given or emailed to your customer.
You need to let your customers know about the surcharge, only surcharge to cover the card processing fees, and let them accept the surcharge or pay another way.
For example, this could include communicating to your customer base prior to implementing a surcharge, having signage in your salon, and giving customers an alternative payment option, like cash, if they don’t wish to pay the surcharge.
It’s important for both business owners and customers to understand surcharging policies in Australia and New Zealand. Follow government regulations and guidelines and meet your obligations to ensure fairness and transparency for your customers, who can then make informed decisions about their preferred payment method.
Frequently asked questions
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Can I add surcharging to my online payments?
At this stage no, surcharging is only available for transactions made using our TimelyPay terminals. -
Can I use the new surcharge feature to charge for public holidays and weekends?
Our surcharge feature just covers terminal card processing fees at this stage, so you wouldn’t be able to do a customised seasonal surcharge for a higher percentage amount right now. However, there is a workaround where you simply create a product called 'surcharge' and then manually calculate the 20% and edit the product price -
Can I turn off surcharging for my friends/family/VIP clients?
We don’t have particular settings to not surcharge particular clients right now, but you can quickly remove the surcharge from any transaction by turning it off in the settings, processing the transaction, and then turning it back on again.