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Wednesday 29 June 2011

Card Charges – A Hollow Victory

The outcome of the “super complaint” brought by Which? magazine over charges for credit and debit cards reached its conclusion yesterday, with the Office of Fair Trading (OFT) apparently now ready to clamp down on the practice. What is known as “drip pricing” adds several pounds to prices, although it is claimed that a debit card transaction costs no more than 20p to process.

Some in the press are painting this as a great victory, something to celebrate, and the harbinger of lower prices. And they are utterly deluded in doing so: those of us who have experienced – or perhaps that should read suffered – the likes of Ryanair over the years know that the Millwall of air carriers (everybody hates us and we don’t care) have more than one chapter in their cat skinning handbook.

That should have been obvious after seeing the way that Ryanair have shamelessly baited BA and the charter boys over fuel surcharges: as I pointed out at the time, Michael O’Leary’s finest are not a charitable organisation, and the idea that they would take the hit on rising fuel costs and not recoup the money from punters is the stuff of fantasy.

So it will be on debit card charges: at present, Ryanair hits a family of four with an extra £48 for a return flight, even if they book and travel as one (£6 per sector per passenger). If they are unable to get the revenue that way, then, as with rising fuel costs, it will just be calculated into the base price. That means those paying by debit card may pay less, only for everyone to pay more.

Only where punters have the ability to shop around, as with rail travel, will there be a way to avoid card charges: some operators don’t levy a charge, even for credit cards. London Midland, which runs trains between London’s Euston terminus, the West Midlands and North West, does not charge a booking or a credit card fee.

Sadly, this does not help with those holiday flights, where punters will find that, although carriers may no longer have them over a barrel, they will have them over something that looks remarkably similar.

[Are the low-cost airlines bothered at the OFT ruling? Well, right now (1130 hours June 29), neither Ryanair nor EasyJet have anything about that ruling on their respective websites. They won’t lose sleep or even break sweat over it]

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