PUBLISHED : Sunday, 19 September, 1999, 12:00am
UPDATED : Sunday, 19 September, 1999, 12:00am

What's the story? We've been told some retailers are asking customers using credit- and charge-cards to pay a surcharge. Card holders already pay substantial yearly fees (up to $650 for a American Express Gold Card) and face penalties on late repayments, so why should we pay even more to use the cards? How common is this practice? We phoned four businesses (three travel agents and a photographic-supplies shop) asking whether they accepted credit cards and what, if any, surcharge we would have to pay. Three of the four companies explained we would have to pay around three per cent extra: one travel agent said it made no additional charge.

Why do retailers charge extra? To cover the cost of accepting cards. Card companies charge retailers an average 2.5 per cent of the gross sale value. If the retailer has already slashed prices to attract customers (as many travel agents do), this commission may make the difference between profit or loss.

Why should we pay extra? The Consumer Council says we shouldn't. Although there is no law against this practice in Hong Kong, the council says if a shop displays a sign saying it accepts credit cards it should make no distinction between cash and card customers.

What does American Express say? It does not allow its merchants to surcharge. The company says any retailer who does so is in violation of the Card Acceptance Agreement and will be investigated. 'Firstly we encourage card members to refuse to pay the surcharge,' says Lin Wan, director of public affairs and communications. 'Secondly, we encourage card members to reconsider their purchase at these establishments ... Finally we encourage card members to report cases of surcharging.' If you make a valid complaint, you'll get 500 free membership reward points as a 'thank you'.

What does HSBC say? The same as American Express, although it did not mention a reward scheme.

What does Standard Chartered say? It does not allow its merchants to surcharge. However, it points out that retailers may offer a discount to customers who pay cash. This, says the bank, is an agreement between customer and retailer and, providing the card member is happy, it is not necessarily a matter for investigation.

What's the upshot? If a retailer offers you a discount for cash payment, why not take advantage? If the retailer tries to force you to pay more than the advertised price, you can refuse and you will get the full support of the card companies and the Consumer Council. Contact your card provider - American Express, tel: 2277-2310; HSBC, tel: 2748-3322; Standard Chartered, tel: 2886-8888 - or the Consumer Council hotline, tel: 2929-2222. Finally, we would like to hear from anyone who experiences surcharging.