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ASIC pings Aldi for credit card failure

German discount retailer Aldi might be the hot supermarket brand with shoppers at the moment  but the chain, known for its heavily discounted range of groceries, clothing and other merchandise, looks to have failed to properly inform its customers about the true cost of paying by 'tap and go' at the check-out.

The Australian Securities and Investments Commissionon Monday reported that Aldi has pledged to improve signage and other point-of-sale communication about the disclosure of credit card surcharges in its supermarkets following an action by the corporate regulator.

Aldi, owned by the highly secretive and reclusive Albrecht family of Germany, failed to consistently disclose in all of its stores that there is a 0.5 per cent surcharge for consumers paying by credit card, and specifically disclose that transactions made using 'tap and go' contactless payment systems were also subject to the 0.5 per cent surcharge, which applied in ALDI stores where either a credit card or debit card is used.

Under the Australian Securities and Investments Commission Act 2001 (ASIC Act), a failure to adequately disclose surcharges, or creating the impression that surcharges do not apply, may be misleading or deceptive. 

An ASIC review of signage in a select number of Aldi supermarkets found that the 0.5 per cent credit card surcharge was disclosed in some stores by a sign above the registers and, in others, by a sticker at the registers. In two stores, there were no signs or stickers, the corporate regulator said.

For credit card payments where a PIN or signature is used, disclosure of the 0.5 per cent surcharge was made on the credit card terminal screen after customers inserted or swiped their card to pay for their purchase.

‘’ASIC considered that this was too late, particularly in stores where there was no other disclosure,’’ a statement from the regulator said yesterday.

ASIC was also concerned that for all contactless payment transactions, which are currently treated as credit card transactions for all merchants, there was no specific disclosure at all in Aldi stores that these transactions also attract the 0.5 per cent surcharge irrespective of whether customers used a debit or credit card.

Deputy chairman Peter Kell reiterated the need for merchants to clearly disclose any credit card surcharges.

'Merchants need to be transparent about fees and charges where credit card surcharges apply so that consumers can consider using other payment methods without any additional costs. For example, at Aldi stores, payment by EFTPOS by selecting the 'savings' or 'cheque' option does not attract a surcharge.’’

A recent report from broker UBS said Aldi could almost double its sales in the next five years, challenging leading supermarket chains Woolworths and Coles and grabbing a key share of the nation’s $85 billion grocery market.

It is believed Aldi has sales of around $5.3 billion in Australia from its more than 300 stores.

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