The secret card fee stinging Coles shoppers that you probably don’t know about
Customer hit with $18 transaction fee
By Amy Sinclair
January 16 2020
Next time you shop at Coles, you may want to think twice before using the ‘tap and go’ option when you pay.
The supermarket giant recently announced changes to the way it processes payments - and the shift could result in customers being stung with extra fees from their bank.
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The change means that if you tap your Visa Debit card to pay for your groceries, you could be hit with bank charges. This is because it is now being processed by Coles as an eftpos transaction - and given that many accounts have limited eftpos transactions, shoppers may be hit with extra charges. The only way to get around it, is to insert your card.
Some shoppers have already taken to Facebook to complain about the fees, explaining that it was only when they spoke to their banks that they learnt of the Coles change.
Posting on the Markdown Addicts Facebook group, Coles shopper Julie wrote: ‘I just went to my bank to question an $18 transaction fee (never had one before) they told me that Coles have changed [the] format on their Eftpos machines and if you TAP your card it goes through as an EFTPOS transaction not Credit (I have unlimited credit transactions on my account but limited EFTPOS transactions). They told me to now insert my card and select credit.’
A fellow Coles shopper responded that she too had a mysterious transaction fee, saying: ‘That’s strange ... I had $11 charge too for transaction fees which I’ve NEVER been charged and I’m at Coles daily.’
Another shopper said: ‘I rang my bank and ANZ told me that when you tap and go a Visa Debit card it shouldn’t be treated as a Eftpos transaction - Coles have decided to treat it as an Eftpos transaction, not the bank. So it’s Coles making money. They say it’s something to take up with Coles, not them because they don’t believe it should be an Eftpos transaction.’
Another shopper said she’d also followed up the news with her bank, writing: ‘I’m with Newcastle Permanent.... I went into the bank today and my account is a recent one but I have unlimited transactions on the credit option (it’s a debit card) but limited Eftpos transactions... Coles have changed their format that when you Tap it goes through as Eftpos.... they have to pay Visa for that option so have changed it ....’
Confirming the change to their payment system last year, a Coles spokesperson tells New Idea Food: ‘Coles Group periodically assesses it’s capabilities in processing payments and last year decided, like many other acquirers and merchants in Australia, to change the way it processes some debit card payments at its supermarkets, liquor stores and Coles Express sites.
‘This means that when a customer taps their Visa debit card the purchase will be automatically processed via eftpos, instead of Visa/credit. If a customer wishes to pay via Visa/credit, they need to insert their card and manually select credit.
‘The new process will make it easier for customers to keep track of their budget as the payment may appear on their account sooner than when previously processed via Visa.’
However Warwick Ponder, Head of Corporate Affairs and Communications for eftpos, says they 'strongly believe' that customers shouldn't be impacted by the change.
'This issue impacts a very small percentage of consumers who bank with financial institutions that continue to charge per transaction fees on a small number of accounts,' Mr Ponder tells New Idea Food.
'eftpos strongly believes that customers should not be impacted, as the funds come out of the same account. These cards are dual network cards and merchants can choose to route transactions to either eftpos or the other scheme to manage costs, which can have positive impact for the merchant and all of their customers.
'The vast majority of financial institutions changed this practice a long time ago (particularly after eftpos interchange fee rates were reversed in favour of issuing banks in 2012).
'In 2017, eftpos queried these financial institutions, noting the potential impact to their customers. This process was reiterated again in 2019.
'Our advice to customers who experience this issue is to talk to their financial institution or use a different card.
'Alternatively, customers can choose to dock their cards and select a different network.'
Originally published as The secret card fee stinging Coles shoppers that you probably don’t know about
Amy Sinclair is a former editor who loves all things food, cooking and eating - especially the eating! When she's not looking after her three children, you'll find her in the kitchen or busily hiding online shopping purchases from her husband.