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Lessons the low cost airlines could learn from fitted kitchen retailers

Chris Turnbull

Lessons the low cost airlines could learn from fitted kitchen retailers

I read with interest that the perennial news story about credit and debit charges levied by businesses and, in particular the low cost airlines, has resurfaced as the OFT’s consultation on the issue comes to an end.

This isn’t the first time that the airlines have been criticised for their lack of transparency and fairness in their pricing, a subject I’ve blogged on previously about similar practices in our own market.

But whilst the issue is clearly very emotive – and I’m no apologist for the airlines – are you and me, the customers, partly to blame through our desire to pay the lowest cost for everything?

Is the success of the low cost airlines not entirely due to our desire and susceptibility for attractive headline prices?

Clearly, where the airlines let themselves down is that the size of the charge bears no relation to the actual cost, their lack of payment method alternatives and poor transparency of these costs until you’re well through the transaction process.

We took a decision at the beginning of the year to offer customers the additional option to pay their interim and final payments by debit or credit card.  Having looked at the charges being levied by our merchant acquirer (23p for debit cards and up to 1.89% for credit cards), we took the decision not to pass on the debit card levy.

However, for the record, we do charge 2% for credit cards with the additional 0.11% used to cover costs such as the monthly terminal rental and till rolls and the delay in receiving payment from the bank.

Not passing on this levy (a charge, for example, that would amount to £125 on a £5,000 payment) would make a significant dent in the profitability of a job which we would inevitably have to pass on via a higher charge for their kitchen to the customers electing to pay by credit card.  In a market where price is one of the key determinants, hiding this optional charge in the total cost could easily make the difference between us winning a job or a potential customer going elsewhere.

By making clear the optional charge payable at the earliest appropriate time customers are free to make the decision whether they want to pay by credit card – and incur the charge – or one of the other, levy-free options to pay such as by bank transfer, cheque or even good old fashioned cash!

As I blogged recently, it’s important to us to run our business in the right way – a way that, in the long run, has a positive effect in terms of driving future recommendations from delighted customers.

So not making a charge for debit card transactions was an easy decision for us and is, we feel, the right thing to do (we make our money selling kitchens, not buncing on a charge we would choose not to levy if we didn’t have to). We feel that by being open, honest and transparent on the issue we’re being true to our company values and brand proposition.

I find it strange the low cost airlines and other business who do make the charge, don’t think the same!