Business News Legal Live Business

New transaction charge rules could affect ticketing

By | Published on Wednesday 10 April 2013

Houses Of Parliament

New regulations came into effect last weekend that will stop UK companies from including anything but ‘cost of sale’ in payment surcharges, eg credit card booking fees added to ticket purchases.

Stemming from a bit European law, the Consumer Protection (Payment Surcharges) Regulations – passed by parliament last year and brought into effect on 6 Apr – say that where credit card fees are added to purchases, a seller can’t use that extra charge to increase profit margin, ie the fee must only cover costs directly linked to the credit card transaction. It’s all part of an effort to demystify the extra fees that are sometimes added to purchases in addition to advertised prices, something the live entertainment sector is particularly known for doing.

Of course quite what constitutes “costs directly linked to the credit card transaction” is debatable, and the government’s Department For Business, Innovation and Skills has issued guidelines to try to define that notion more, though it still leaves quite a bit of room for interpretation.

Obviously any fees charged to a seller by a credit card provider can be included, but so – according to the guidelines – can any costs directly related to fulfilment IT, risk management and anti-fraud efforts. More general admin costs, and things like staff training, would not be allowed to be included though as, says the guidelines, these are general business requirements that should be covered by the price of the original product.

Whether any of that will actually make credit card fees any less confusing for consumers is debatable, but it will be interesting to see if any ticket sellers need to recalculate their credit card transaction fees as a result of the new rules. If so, presumably the lost pennies will just be added to other booking fees, making little difference overall.