Melbourne nightclub Brown Alley is slammed over ridiculous surcharge fee: 'Wow'

A trendy Melbourne nightclub has been slammed for the 'ridiculous' surcharge it adds to all EFTPOS transactions.

The Brown Alley nightclub on Lonsdale St in the CBD charges a whopping five per cent - more than double the addition charged by most outlets - for using bank cards.

The customer who posted about the charge on Reddit said they had referred the nightclub to the Australian Competition & Consumer Commission (ACCC).

Alongside an image telling revellers about the high charge, the poster wrote: 'Found out that Brown Alley nightclub now charges a ridiculous 5 per cent surcharge … for all payments on card. Wow.'

The sign reads, 'Dear customers please note our EFTPOS machines have a 5 per cent surcharge on all transactions. Thanks for your understanding.' 

The customer wrote that 'I stated my disapproval to one of the managers at Brown Alley, very politely. 

'And yep, he was just dismissive and rude, claiming that it's our club, we can do what we want.'

According to the ACCC, 'Businesses can charge a surcharge for paying by card, but under the Competition and Consumer Act, the surcharge must not be more than what it costs the business to use that payment type.

'If a business charges a card payment surcharge, it must be able to prove the costs it is based on, and follow the rules about displaying the surcharge.'

Last week, a consumer expert revealed how customers are being hit with hidden surcharges to use their debit cards, costing them as much as $140 in fees every year.

Finder's head of consumer research Graham Cooke told Daily Mail Australia many restaurants, bars and retail businesses are not disclosing their fees to customers.

'People are using credit and debit cards more because of the increased availability of EFTPOS machines,' he said.

Earlier this month, a cash supporting movement launched Cash Out Day where queues of residents were seen standing outside banks as they waited to withdraw money. 

The most popular way to pay with card is tap-and-go, which accounts for 95 per cent of in person transactions, and is the most expensive.

While inserting a card into an EFTPOS machine typically costs a merchant less than 0.5 per cent per transaction, using contactless Visa and Mastercard payment can amount to 0.5 to 1 per cent each time for debit cards and 1 per cent to 3 per cent for credit cards.

On a purchase of $100 the average cost added is 28c for EFTPOS, 52c for using the Mastercard network, 47c for using Visa and a whopping $1.88 for digital payments provider Square.

While some larger businesses absorb these costs into the price of their goods and services many smaller ones lump customers with the bank fees.

Even some bigger businesses charge for using plastic.

While Coles and Woolworths supermarkets absorb fees into their prices, discount retailer Aldi charges a small standard fee on all card transactions.

Mr Cooke said it was 'kind of impossible to use plastic in Australia and not encounter one of these fees'.

Some commenters on the Reddit post about the Brown Alley club, which is part of the Colonial Hotel, said they doubted the ACCC would do anything, but the original poster said that was not the case. 

'Every report I've ever made has been followed up, I get it's sometimes easy to think big gov oversight doesn't work, but the ACCC ain't it.

'These things take time though, if you really want to know whether they do something or not - Check back later.'

 Daily Mail Australia has contacted Brown Alley for comment.