Low Margins May Force Surcharging For Credit Card Use

MTA represents more than 4000 members across all sectors of the automotive trade.  MTA spokesman Ian Stronach says “low margins, particularly in the fuel retailing sector mean some businesses may have no choice but to impose a surcharge to recover costs.”

A recent survey carried out amongst more than 130 MTA members operating a service station showed that 86 percent of them were either considering or definitely planned to introduce a surcharge, with the decision as to it being a percentage based or flat fee system being evenly divided.

Supermarket docket programmes that were offering large discounts over the Christmas period may have left the public with the impression that this is a high margin product line, but this is not so for independent operators.

Commenting, Stronach says “ With the current margins on petrol and diesel usually fixed, and typically around the 2.5 percent mark (4.5 cents per litre) and credit card processing fees of approximately 1.25 percent, service station operators especially, have little ability to absorb these costs and increasingly have to consider passing them on.” 

“While it’s the last thing they want to have to do in the current environment, frankly there are many who see themselves as having no other choice.”

Low margins have already contributed to the steady decline in service station numbers over the years, which has seen them fall from a peak of nearly 4500 in the mid 1970’s through to around 1,000 today.  And as the price of fuel increases so the margins of service station operators invariably decrease even further.

MTA is supportive of the stance taken by its members, and will be working with them to ensure that if and when they choose to introduce any surcharges, that they are fully compliant with Commerce Commission requirements such as clear signage advising of the surcharge and applicable rate or cost.