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aviation

Jan 21, 2013

Qantas says it makes nothing from credit card surcharges!

That domestic air fare credit card charge surcharge that Qantas and Virgin Australia miraculously decided should be exactly $7.70 is being outlawed, even though it is to the cent what Qantas says it actually costs. Really!

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The reaction of a finance industry contact to Qantas claiming not to make a cent from the credit card surcharges it places on bookings was not what you would expect from disbelieving consumers.

No siree. It was, with a few rude words deleted, that “if those fools can’t even make a buck out of a …..ing  credit card surcharge they are …..ing unbelievably incompetent [persons].”

Strong words indeed. The exchange was set in motion by a Travellers Check feature by Clive Dorman in the Fairfax media, drawing attention to the fact that the airline card fee surcharges would be subject to new RBA rules in March that would end, or ban, surcharge ‘gouging’.

Did Qantas have a statement in response to this issue? It did.

” We are assessing the new RBA guidelines and will make a decision about any changes in our surcharging policy once the credit card companies publish their responses, which has not yet happened.  

“The Reserve Bank has made it clear that merchants such as Qantas may continue to recover the reasonable costs of accepting credit cards – which are more extensive than just the merchant service fee charged by card companies.  

“Qantas has never recovered more through surcharges than it costs us to accept credit card payments in the first place.  Claims that we make a profit from them are wrong.”

Dilemma. My finance guru who takes everything Qantas says as gospel (causing us to disagree, quite a lot) is aghast that the airline is so totally incompetent that it can’t even make money ripping off consumers, which is what the finance industry in general regards as a proper, legitimate and even sacred duty by a listed company.

On the other side of the street, baying for blood, will be the consumer advocates who will say that Qantas is totally unbelievable and engaged in the wholesale ripping off for a service that would cost it next to nothing.

Me?  Well, it’s another reminder that if you want to make money, you don’t actually go out and provide a tangible product, like a seat on a flight, you just invent a fee to apply to the product, and then cream it off the top of the sales revenue until some killjoy comes along and says ‘naughty’ and then you go and devise an even better ripoff.

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